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FEDERAL RESERVE BANK
OF N EW YORK
r Circular No. 6 3 7 0
L

July 18, 1969

COLLECTION OF CASH ITEMS
Revisions of Operating Circulars Nos. 4 and 5

To the M em ber Banlcs and N onm em ber Clearing Banks
o f the Second Federal R eserve D istrict:

Enclosed are copies of the following documents of this Bank, all revised effec­
tive September 2, 1969:
Operating Circular No. 4, “ Collection of Cash Items,” and
Operating Circular No. 5, “ Time Schedules— Availability of Credit for Cash Items,”
and its Appendix No. 1, “ New York Head Office Time Schedule,” and Appendix No. 2,
“ Buffalo Branch Time Schedule.”

The revisions result from the discontinuance on September 2, 1969 of the prac­
tice by both our Head Office and Buffalo Branch of processing and dispatching cash
items to all payor country banks located in the Second Federal Reserve District.
Thereafter, our Head Office and Buffalo Branch will each handle cash items payable
at payor banks located in the territory of the other office in the same manner as items
payable in another Federal Reserve District. Thus, most payor banks in the Sec­
ond District will receive cash letters from only that Reserve Bank office in whose
territory the payor bank is located, thereby minimizing the accounting activities
associated with the receipt of multiple cash letters from both the Head Office and
Buffalo Branch.
Revised Appendix No. 1 of Operating Circular No. 5 also reflects the cessation
at the Head Office, beginning September 2, 1969, of the practice of accepting for
deposit items of $500 and over until 3:30 p.m. on Mondays through Fridays and
until 11:00 a.m. on Saturdays. Too few banks have made use of this service to war­
rant our special handling of such items. Many items in such deposits can be included
with those items that are accepted until 9:30 p.m. on Mondays through Fridays and
11:00 a.m. on Saturdays.
The revisions also incorporate the outstanding supplements.
Additional copies of the enclosures will be furnished upon request.




A

lfred

H

ayes,

President.

Federal Reserve Bank
of

N ew York

[

Operating Circular No. 4
Revised effective September 2, 1969

COLLECTION OF CASH ITEMS

To the Member Banks and Nonmem'ber Clearing Banks
of the Second Federal Reserve District, and Others Concernedi ;

1. Regulation J of the Board of Governors of tlie Federal Reserve
System (hereinafter referred to as Regulation J ), this operating cir­
cular, and our time schedules prescribe the terms and conditions upon
which we will handle cash items for collection. This operating circular,
our Operating Circular No. 6, and our time schedules are issued pur­
suant to the provisions of Sections 4, 13, 14(e), and 16 of the Federal
Reserve Act and the provisions of related statutes and in conformity
with the provisions of Regulation J. All terms defined in Regulation J
and used herein have the meanings stated in that regulation.
2. Unless otherwise stated, all references to the Federal Reserve
Bank of New York, or “ this Bank,” will include the Head Office and
its Buffalo Branch.
Items which will be handled as cash items
3.
Except as otherwise provided by this operating circular, the
following items may be sent to this Bank for handling as cash items
in accordance with and subject to the provisions of Regulation J, of
this operating circular, and of our time schedules:
(a) Checks drawn upon any bank included in the current “Federal
Reserve Par List,” which indicates the banks upon which checks are
collectible at par through the Federal Reserve Banks and is furnished
from time to time and supplemented each month to show changes sub­
sequent to the last complete list.
(b) Government checks, postal money orders, and food stamp cou­
pons.2
(c) Such other demand items, collectible at par in funds accept­
able to the Federal Reserve Bank of the District3 in which such items
are payable, as we may be willing to accept as cash items.
1 Instructions pertaining to the handling o f cash items b y collecting and paying banks are
contained in our Operating Circular N o. 6, entitled “ Instructions to Collecting Banks and
P aying Banks.”
2 Provisions governing the collection o f the foregoing cash items are contained in A ppendix A ,
A ppendix B , and Appendix C, respectively, o f this operating circular.
8 F or the purposes of this operating circular, the V irgin Islands and Puerto R ico shall be
deemed to be in or of the Second Federal Reserve District, and Guam shall be deemed to be
in o r o f the Twelfth Federal Reserve District. See R egulation J, note 1.




4.
Whenever any instrument is accepted by us for credit to our
own account, the account of another Federal Reserve Bank, or any
account on our books, we will handle the instrument as a cash item
if it would have been a cash item but for the fact that it was not sent
to us by a sender.

Items which will not be handled as cash items
5. This Bank will not handle any item as a cash item if
(a) A passbook, certificate, or any other document is attached to
the item; or
(b) Special instructions, including requests for special advice of
payment or dishonor, accompany the item; or
(c) The item consists of more than a single thickness of paper,
except as provided in paragraph 41 of this operating circular; provided,
however, that any mutilated, erroneously encoded, or other cash item
contained in a carrier qualifying under existing standards for handling
by high-speed check-processing equipment will be handled by us as a
cash item; or
(d) Except as provided in paragraph 41 of this operating circular,
the item has not been preprinted, or post-encoded before its receipt by
us, with the routing symbol and the suffix of the transit number of the
paying bank (or nonbank payor) in magnetic ink in E-13B type in the
manner prescribed, and at the location assigned, by the A.B.A.; pro­
vided, however, that this Bank will handle such items as cash items
when, in our judgment, special circumstances justify such handling.
Such items, if sent to this Bank for collection, should be sent only as
noncash items and, if so sent, will be received by us for collection
subject to all the terms and conditions of Regulation J and of our
operating circular relating to the collection of noncash items.
6. In the event that an item which will not be handled as a cash
item by virtue of paragraph 5 is sent to any Federal Reserve Bank
in a cash letter, the Federal Reserve Bank will treat it as follows:
(a) An item of $1,000 or over received from a sender located out­
side the city of the receiving Federal Reserve office will be charged back
and entered for collection as a noncash item; and
(b) Any other item will be charged back and returned.
7. We reserve the right, in our discretion, to return or to handle
as a noncash item any item which has previously been dishonored or
if special conditions require that it be handled as a noncash item, and
this Bank shall decide whether such special conditions exist.
8. A cash item payable by or through one office of a bank will not
be received from another office of the same bank for collection as either
a cash item or a noncash item by us or by any other Federal Reserve
Bank.




%

Terms and conditions of collection
9. Regulation J prescribes terms and conditions under which, all
Federal Reserve Banks will collect checks and other cash items for the
senders thereof. Such terms and conditions and the terms and con­
ditions of this operating circular, our Operating Circular No. 6, and
our time schedules will apply to the handling of all cash items which
we accept for collection thereunder and to the handling of all bank
drafts and other forms of payment or remittance which we receive
for such items.
10. Section 210.3 of Regulation J provides that the provisions of
that regulation and of the operating circulars of the Federal Reserve
Banks shall be binding upon the sender of a cash item and shall be
binding upon each collecting bank, paying bank, and nonbank payor
to which the Federal Reserve Bank, or any subsequent collecting bank,
presents, sends, or forwards a cash item received by the Federal
Reserve Bank. Section 210.16 of Regulation J provides that each
Federal Reserve Bank shall issue operating circulars not inconsistent
with the provisions of that regulation governing the details of its
operations in the handling of cash items and containing such other
matters as are required by the provisions of that regulation.
11. A cash item payable in any other Federal Reserve District
and forwarded for collection to the Federal Reserve Bank of such
other District by us or sent direct to such Federal Reserve Bank for
our account by a sender which maintains or uses an account with us
will be handled by such Federal Reserve Bank subject to the terms
and conditions of Regulation J and of the applicable operating cir­
culars and time schedules of such Federal Reserve Bank; but we
will give credit to the sender for such item in accordance with our
time schedules.
12. Under Section 4-204(1) of the Uniform Commercial Code, a
collecting bank must send items by reasonably prompt methods, taking
into consideration any relevant instruction, the nature of the items,
the number of such items on hand, the cost of collection involved, and
the methods generally used by it or others to present such items. In
furtherance of the purpose of this requirement, and in the interest of
good banking, the indirect routing of cash items is discouraged, and
member and nonmember clearing banks should not send to us or to
other Federal Reserve Banks for our account any items payable in
other Federal Reserve Districts which bear the endorsements of banks
located in other Federal Reserve Districts, in cases where it is evident
that such items have been routed indirectly.
Preparation of cash letters by senders
13. All cash items sent to us, or to another Federal Reserve Bank
direct for our account, may be listed without description. However,
each sender should bear in mind the importance of maintaining ade­
quate records to enable it to identify its depositors or other endorsers




3

on such items, so that, in the event any such item is lost or destroyed
while in transit to a Federal Reserve Bank, or is thereafter lost or
destroyed, the sender may be in a position to take appropriate action
with respect to the item.4 All cash letters and tape listings accompany­
ing such cash letters should be dated and identified with the name and
the A.B.A. transit number, if any, of the sender.
14.
We reserve the right to require such separate sorts of cash
items as we may deem appropriate; and we reserve the right to require
both separate sorts and deposits in separate cash letters of Government
checks, postal money orders, and food stamp coupons. Other instruc­
tions relative to sorting and listing of cash items are set forth in our
time schedules.
Endorsements
15. All cash items sent to us, or to another Federal Reserve Bank
direct for our account, should be endorsed without restriction to, or
to the order of, the Federal Reserve Bank to which sent, or endorsed
to, or to the order of, any bank, banker, or trust company, or en­
dorsed with equivalent words or abbreviations thereof. The endorse­
ment of the sender should be dated and should show the A.B.A. transit
number of the sender, if any, in prominent type on both sides of the
endorsement.
16. In the event a cash item is received by a Federal Reserve
Bank from a sender without the endorsement thereon of such sender,
the Federal Reserve Bank may present, send, or forward the item as
if it bore such endorsement, or place on the item the name o f such
sender and the date of its receipt by the Federal Reserve Bank, or
return the item to the sender for proper endorsement by the sender.
This Bank makes the warranties stated in Section 210.6(6) of Regula­
tion J by presenting, sending, or forwarding a cash item. These
warranties arise whether or not such item bears the endorsement of
this Bank.
Presentment for payment
17.
As contemplated by Section 210.7 of Regulation J, any cash
item may be presented for payment by a Federal Reserve Bank or a
subsequent collecting bank, may be sent by a Federal Reserve Bank
or a subsequent collecting bank for presentment and payment, or may
be forwarded by a Federal Reserve Bank to a subsequent collecting
bank with authority to present it for payment or to send it for
presentment and payment. However, this Bank and the other Federal
Reserve Banks reserve the right to return without presentment any
4
In the event o f the loss or destruction of a cash item while in transit, this Bank will not
indemnify the sender or any prior party for costs incurred or expenses sustained in identifying
the item, reconstructing it, o r obtaining a substitute item and processing it for collection, n or
for any other loss or expense arising from the loss or destruction.




4

cash item payable by or through a bank which is not on the “ Federal
Reserve Par List” or may have been reported ,closed.
18. We do not by this operating circular, or otherwise, agree to
present any item, or to cause any item to be presented, earlier than
such item is required to be presented, in the exercise of ordinary care,
under the provisions of applicable State law.
Uniform instructions regarding protest and advice of nonpayment
19. Except as provided in paragraph 20 hereof, all Federal
Reserve Banks will receive, handle, and forward cash items subject
to the following uniform instructions regarding protest and wire
advice5 of nonpayment, except that Government checks will not be
protested; and any contrary or special instructions noted on cash
letters or otherwise transmitted with cash items will be disregarded:
(a) PROTEST any dishonored item of $1,000 or over:
(i) which appears on its face to have been drawn at a place
which is not within any State,6 unless it bears on its face the A.B.A.
no-protest symbol of a Federal Reserve Bank or of a preceding
bank endorser, or
(ii) which bears on its face the legend, “PROTEST RE­
QUIRED,” of a Federal Reserve Bank or of a preceding bank
endorser.
(b) DO NOT PROTEST:
(i) any item of less than $1,000, or
(ii) any item of $1,000 or over unless it is protestable under
subparagraph (a).
(c) WIRE ADYICE of nonpayment of any item of $1,000 or over,
unless it has not been paid because of a missing, irregular, or unsatis­
factory endorsement or unless it bears on its face the legend, “DO NOT
WIRE NONPAYMENT,” of a Federal Reserve Bank or of a preceding
bank endorser. Include in the advice of nonpayment, the amount of the
item, the reason for nonpayment, the date of our cash letter, the name
of the drawer or maker, and the names of the two endorsers immediately
preceding the Federal Reserve Bank or their A.B.A. transit numbers,
if any.
(d) DO NOT WIRE ADVICE of nonpayment of:
(i) any item of less than $1,000, or
(ii) any item of $1,000 or over unless such advice is required
by subparagraph (c).
20. DO NOT PROTEST AND DO NOT WIRE ADYICE of non­
payment of any cash item, regardless of amount, endorsed by the
Treasurer of the United States, or endorsed for credit to the Treasurer
5 F or the purposes of this operating circular, the term “ wire” includes telephone, telegraph,
and cable.
6 The term “ State” is defined in Section 2 1 0 .2 («) of Regulation J to mean any State o f the
U nited States, the District o f Columbia, or Puerto R ico, or any territory, possession, o r de­
pendency of the U nited States.




5

of the United States, or bearing on its face or in an endorsement the
legend ‘ ‘ This check is in payment of an obligation to the United States
and must be paid ,at par. N.P. Do not wire nonpayment” or words
of similar import.
21. If any sender desires to have any cash item (other than a
Government check, postal money order, or food stamp coupon)
handled by us or by any other .Federal Reserve Bank under any
instructions differing from the uniform instructions given above, it
will be necessary for such sender ,to forward such item as an indi­
vidual noncash item, with the instructions noted in the letter of trans­
mittal, for collection and credit when paid, in accordance with the
terms of our current operating circular relating to the collection of
noncash items.
22. This Bank shall have no responsibility for determining
whether any other bank has (a) made or provided for the protest
of any cash item protestable under the provisions of this operating
circular or (b) given any wire advice of nonpayment required under
the provisions hereof.
Communications by wire; costs and charges
23. Telegrams pertaining to payment, nonpayment, or tracing
of cash items, or in connection with receiving or transmitting pertinent
information or instructions, will be sent to the extent practicable over
the Federal Reserve Leased Wire System without cost to member
and nonmember clearing banks. The cost of all such telegrams and
cables sent over commercial wires will be charged to the senders
from which the items were received, and commercial wire telegrams
and cables to such senders will be sent collect. A Federal Reserve Bank
may, in its discretion, use the telephone in lieu of telegraph or cable
for any purpose indicated by this paragraph.
Time schedules and availability o f credit
24. Section 210.16 of Regulation J provides that the Federal
Reserve Banks may classify cash items, require separate sorts and
cash letters, and provide different closing times for the receipt of
different classes or types of cash items. In conformity with that
provision, we publish and furnish to member and nonmember clearing
banks and other senders time schedules containing further provisions
with regard to separate sorts and cash letters and which indicate
when credit for cash items will become available for withdrawal and
other use by the senders after receipt by us. For all items accepted
as cash items, the senders will be given immediate credit or deferred
credit, in accordance with such time schedules and as provided in
Regulation J. Credit for cash letters containing items unsorted as
to availability may be deferred for the longest period of availability
prescribed by the current time schedules of this Bank with respect
to any item enclosed.
6



25. Time schedules do not in many instances show the actual
time required for collection, and advices from us showing the availa­
bility of items cannot be considered as advices of actual payment on
the dates of availability. Credit will in all instances be subject to
receipt of payment by us in actually and finally collected funds.
Immediate credit
26. For all such cash items as are accepted for immediate credit
in accordance with our current time schedules, immediate credit will
be given upon our books at full face value in the reserve account,
nonmember clearing account, or other appropriate account upon the
day of receipt, and the proceeds will at once be counted as reserve
for the purposes of Regulation D and become available for withdrawal
and other use by the sender; provided, however, that we may in our
discretion refuse at any time to permit the withdrawal or other use
of credit given for any item for which we have not yet received pay­
ment in actually and finally collected funds.
Deferred credit
27. For all such cash items as are accepted for deferred credit
in accordance with our current time schedules, deferred credit will
be entered upon our books at full face value, but the proceeds will
not be counted as reserve for the purposes of Regulation D nor
become available for withdrawal or other use by the sender until the
ex'piration of the time specified in our time schedules, at which time
credit will be transferred frtom the deferred account to the reserve
account, nonmember clearing account, or other appropriate account
and will then be counted as reserve for the purposes of Regulation D
and become available for withdrawal and other use by the sender;
provided, however, that we may in our discretion refuse at any time
to permit the withdrawal or other use of credit given for any item
for which we have not yet received payment in actually and finally
collected funds.
Instructions to collecting banks and paying banks
28. Instructions pertaining to the handling of cash items by col­
lecting banks and paying banks are set forth in our Operating Cir­
cular No. 6.
Information to senders regarding return items
29. The attention of senders is called to our ‘ ‘ Instructions to Col­
lecting Banks and Paying Banks” to the effect that (a) each paying
bank which takes or receives a eredit or obtains a refund in respect
of a cash item received by it from or through a Federal Reserve Bank
warrants to such Federal Reserve Bank, to a subsequent collecting




7

bank, and to the sender and all prior parties that it took all action
necessary to entitle it to recover such payment within the times limited
therefor; (b) a collecting bank which returns an unpaid item to a
Federal Reserve Bank warrants to such Federal Reserve Bank and
to the sender and all prior parties that its return of the item was
timely; (c) no Federal Reserve Bank shall have any responsibility
for determining whether the paying bank took all action necessary to
entitle it to recover such payment or whether the return of the item
to it by a collecting bank was timely; and (d) if a paying or collect­
ing bank, in accordance with applicable State law, makes a direct re­
turn to the depositary bank of an unpaid cash item which it has re­
ceived from or through us or any other Federal Reserve Bank, any
provisional credit for the item between such paying or collecting bank
and this Bank or any other Federal Reserve Bank, between this Bank
or any other Federal Reserve Bank and the sender, and between this
Bank and any other Federal Reserve Bank shall become and remain
final.
30. If a cash item is returned without entry, we will make refund
to the returning bank and charge the sender only if the latter specifi­
cally authorizes us to do so.
Direct sending of cash items to other Federal Reserve Banks
31. Member and nonmember clearing banks and other senders main­
taining or using accounts with us which have a substantial volume or
dollar amount of cash items payable in any other Federal Reserve
District which they wish to collect through the Federal Reserve Banks
are required to apply to us for authority to send such items direct to
the Federal Reserve Bank of the District in which such items are pay­
able for collection and credit to us; provided, however, that we may,
in our discretion, withdraw such authority at any time. Appropriate
instructions will be transmitted to the member and nonmember clear­
ing banks and other senders which are authorized to send direct.
32. In the event that any sender maintaining or using an account
with us has, in our judgment, a sufficient volume or dollar amount of
cash items payable in any other Federal Reserve District to justify
direct sending and this Bank authorizes such sender to send such
items direct to the Federal Reserve Bank of such other Federal
Reserve District, we reserve the right to decline to accept any such
items from such sender.
Direct sending of cash items to other office of this Bank
33. Member and nonmember clearing banks and other senders
maintaining or using accounts with one office of this Bank which have
a substantial volume or dollar amount of cash items payable in the
territory of the other office of this Bank which they wish to collect
through this Bank are required to apply to us for 'authority to send
such items direct to such other office.




8

34.
In the event that any sender maintaining or using an account
with one office of this Bank has, in our judgment, a sufficient volume
or dollar amount of cash items payable in the territory of the other
office of this Bank to justify direct sending and this Bank authorizes
such sender to send such items direct to such other office of this Bank,
we reserve the right to decline to accept any such items from such
sender unless the items are sent direct.
Reimbursement of transportation costs for member banks
35. Each member bank which sends cash items direct to other
Federal Reserve Banks will be reimbursed by us for postage or other
normal transportation costs, not including insurance, on all such items
sent direct under our authority. Similar reimbursement will be made
also for cash items sent direct to the other office of this Bank. In the
interest of expeditious and economical handling, those direct-sending
member banks that by arrangement deliver to this Bank for consoli­
dated shipment cash items payable in other Federal Reserve Districts
or in the territory of the other office of this Bank should not deviate
from the arrangement except upon prior approval of this Bank. Trans­
portation costs of such consolidated shipments will be paid by us.
36. Claims for reimbursement of transportation costs should be
submitted monthly on our forms, a supply of which will be furnished
upon request. A member bank should submit its claims to the office
of this Bank with which it maintains its reserve account. Upon ap­
proval of the claim, the reserve account of the member bank will be
credited with the amount thereof.
37. Each direct-sending member bank should give constant atten­
tion to methods of shipment and should change the method in any
case in which shipment can be made by another method at a lower
cost and without loss of time in presentment. In cases in which we
pay the transportation costs, we reserve the right to require a change
in method of shipment in any situation where, by the use of another
method, a more efficient handling by the receiving Federal Reserve
Bank will result, or presentment can consistently be made more
promptly, or at a lower cost and without loss of time.
Standardization, sorting, routing, and mechanized processing
38. To facilitate the sorting, routing, and mechanized processing
of cash items, and thereby promote earlier presentment and earlier
return of unpaid items, it is urged that:
(a) In conformity with the A.B.A. Magnetic Ink Character Rec­
ognition Program, the routing symbol and the suffix of the transit num­
ber be encoded on all cash items in magnetic ink in B-13B type in the
manner prescribed, and at the location assigned, by the A.B.A.
(b) The appropriate transit number-routing symbol in fractional
form be clearly imprinted in the upper right corner of all cash items




9

payable by or through all par-remitting banks, preferably in Gothic
type, the face of which measures at least 8 points vertically or 1/9 of an
inch from the top to the bottom of the individual characters.
(c)
Cash items be otherwise conformed to the standards prescribed
by the A.B.A., including a minimum width of 2% inches, a maximum
width of 3% inches, a minimum length of 6 inches, and a maximum
length of 8% inches, and be restricted to a single thickness of card or
paper.
39. If, in our judgment, the processing of any cash item by us
requires the inscription thereon in magnetic ink, or otherwise, of the
A.B.A. transit number, the routing symbol, or both, of the paying
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 accordingly; 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.
40. 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 there­
on at the time of its receipt by us, whether inscribed by magnetic ink
or by any other means, and whether or not such transit number or
routing symbol is consistent with each other form of designation of the
paying bank (or nonbank payor) then appearing thereon; or
(b) Any other form of designation of the paying bank (or non­
bank payor) then appearing thereon, whether or not consistent with
any A.B.A. transit number or routing symbol then appearing thereon.
Photographic copies
41. In the event we receive, as a cash item, a properly prepared
photographic copy of a lost or destroyed item which was eligible for
handling as a cash item, which copy bears a current endorsement of
the sender and the following legend, or one o f 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 and any missing endorse­
ments and the validity of this facsimile are hereby guaranteed, and
upon payment hereof in lieu of the original check, the undersigned will
hold each collecting bank and the payor bank harmless from any loss
suffered, provided the original check is unpaid and payment is stopped
thereon.”
we will handle the copy as follows:
(a)
We will present or send the copy as a cash item to the pay­
ing bank (or nonbank payor), subject to all the rules as to remittance
for, and return of, cash items; or




10

(b) If such paying bank (or nonbank payor) declines to handle
the copy as a cash item but is willing to handle it as a noncash item, we
will charge back to the sender the amount of the copy and will present
or send the copy to the paying bank (or nonbank payor) as a noncash
item under the terms of our current operating circular relating to the
collection of noncash items; or
(c) If such paying bank (or nonbank payor) refuses to handle the
copy, we will charge back the amount of the copy and return the copy
to the sender.
Right to amend
42. The right is reserved to withdraw, to add to, or to amend, at
any time, any of the provisions of this operating circular and of our
time schedules.
Effect of this circular on previous circular
43. This circular supersedes our Operating Circular No. 4, Revised
effective September 1, 1967, and the First Supplement thereto, dated
April 28, 1969.




A

lfred

H

ayes,

President.

11

(Reprint of Appendix A , Revised December 1, 1967)

APPENDIX A
GOVERNMENT CHECKS

1. Government checks drawn on the Treasurer of the United
States will be handled by us as cash items in accordance with, and
subject to, the provisions of Treasury Department Circular No. 21
(31 Code of Federal Regulations, Part 360). Copies of that circular
will be furnished upon request. With respect to matters not covered
by that circular, the terms and conditions of Regulation J applicable
to cash items, of this operating circular, and of our time schedules
shall be applicable to all such Government checks.
2. We will give immediate credit, subject to payment in actually
and finally collected funds, for Government checks as provided in our
time schedules. Such checks will be forwarded by us to the Treasurer
of the United States and shall be subject in all cases to examination
and payment by the Treasurer. Under Treasury Department Circu­
lar No. 21, the Treasurer has reserved the right to examine and to
refuse payment of all Government checks handled by the Federal
Reserve Banks.
3. Section 210.12 of Regulation J, relating to the return of cash
items by paying banks, is not applicable to Government checks. In
the event that the Treasurer of the United States refuses payment of
any Government check upon first examination and such check, or
photographic copy thereof, is returned to this Bank as outlined in
Treasury Department Circular No. 21, the amount of such check
will be charged back to the account of the sender and simultaneously
credited to the account of the Treasurer. This Bank shall have no
responsibility to the sender of any Government check, or any other
owner or holder thereof, with respect to the nonpayment of any such
check and return by the Treasurer of any such check or photographic
copy thereof.
4. The attention of senders is directed to 31 U.S.C. §§ 122 and 129,
to the effect that (a) claims on a Government check which appears of
record to have been paid, must be made within six years after the
date of issuance of the check and (b) an action to enforce liability
upon a forged or unauthorized signature or endorsement or alteration
of any Government check must be commenced within six years after
the presentment of the check, or written notice of such a claim given
within that period, provided that, if a claim is made upon an appar­
ently paid check, the six-year period with respect to the commence­
ment of an action or the giving of written notice will be extended an
additional 180 days.




12

APPENDIX B
POSTAL MONEY ORDERS
1. Postal money orders (United States postal money orders;
United States international postal money orders; domestic-inter­
national postal money orders) ■will be handled by us as cash items in
accordance with an agreement made by the Postmaster General, in
behalf of the United States, and by the Federal Reserve Banks as
depositaries and fiscal agents of the United States pursuant to authori­
zation of the Secretary of the Treasury. With respect to matters no*t
covered by that agreement, the terms and conditions of Regulation J
applicable to cash items, of this operating circular, and of our time
schedules shall be applicable to all such postal money orders.
2. We will give immediate credit for postal money orders received
from a sender maintaining or using an account with us as provided
in our time schedules. Simultaneously with such credit, we will debit
the amount of such money orders against the general account of the
Treasurer of the United States under such symbol numbers as may
be assigned by the Treasurer of the United States; and such credit
to the account of the sender shall then become final as between us and
the sender.
3. The agreement between the Postmaster General and the Federal
Reserve Banks provides, in effect, that no claim for refund or other­
wise with respect to any postal money order debited against the gen­
eral account of the Treasurer of the United States and delivered to
the representative of the Post Office Department as provided in said
agreement (other than a claim based upon the negligence of a Federal
Reserve Bank) shall be made against or through any Federal Reserve
Bank; that, if the Post Office Department makes any such claim with
respect to any such money order, such money order will not be re­
turned or sent to a Federal Reserve Bank, but the Post Office Depart­
ment will deal directly with the bank or the party against which such
claim is made; and that the Federal Reserve Banks will assist the
Post Office Department in asserting such claim, including making
their records and any relevant evidence in their possession available
to the Post Office Department. Section 210.12 of Regulation J, relat­
ing to the return of cash items by the paying banks, is not applicable
to postal money orders.




13

APPENDIX C
FOOD STAMP COUPONS
1. Food stamp coupons will be handled by us as cash items in
accordance with an agreement made by the Secretary of Agriculture,
in behalf of the United States, and by the Federal Reserve Banks as
depositaries and fiscal agents of the United States pursuant to author­
ization of the Secretary of the Treasury. With respect to matters not
covered by such agreement, the terms and conditions of Regulation J
applicable to cash items, of this operating circular, and of our time
schedules shall be applicable to such coupons. We will receive food
stamp coupons only from member banks, nonmember clearing banks
which maintain accounts with us, and nonmember banks which have
arranged with us to send coupons to us for collection for credit to
the account of a member bank on our books. All such banks sending
coupons to us should follow the instructions set forth in an outline of
procedures for commercial banks in handling such coupons under the
current Food Stamp Program, prepared by the United States Depart­
ment of Agriculture.
2. We will accept food stamp coupons received by us in accord­
ance with the following terms and conditions:
(a) Redeemed food stamp coupons should be forwarded to the
office of this Bank maintaining the reserve account or nonmember clear­
ing account to which the proceeds of the coupons are to be credited. We
will give immediate credit for deposits of redeemed food stamp coupons
as provided in our time schedules. Such credit will not be final and will
be subject to reclamation and adjustment.
(b) Food stamp coupons should be separately sorted by denomina­
tions and should be deposited in a separate cash letter. The sending
bank’s transmittal letter should be clearly stamped or marked “FOOD
STAMP COUPONS.” The transmittal letter should show the total num­
ber of, and the total amount of, each denomination of coupons enclosed.
Food stamp coupons should be forwarded to us by the means ordinarily
used by the sender for checks and other cash items; such shipments
will be at the risk of the Department of Agriculture. Sending banks
should retain customers’ deposit slips and any other pertinent records
which would assist in substantiating reimbursement claims against the
Department of Agriculture for coupons lost in transit.
(c) In accordance with the regulations of the United States De­
partment of Agriculture (7 Code of Federal Regulations, Chapter 16),
a portion of a food stamp coupon consisting of less than three fifths of
a whole coupon shall not be accepted for redemption. Any coupon
accepted for redemption shall show on its back either (i) the FOOD
STAMP AUTHORIZATION NUMBER or (ii) the name of the au­
thorized retail food store and, if involved, the authorized wholesale food
concern. Each coupon shall also be cancelled by the first bank which re­
ceives it by indelibly marking “PAID” or “ CANCELLED,” together with
the name of the bank or its A.B.A. transit number, on the face of the




14

coupon by means of an appropriate stamp. No coupon should be en­
dorsed by any bank.
(d)
Additional information concerning the collection of food stamp
coupons will be furnished by us upon request.
3.
Nonmember banks which do not maintain accounts with this
Bank and which have not arranged with us to deposit food stamp
coupons for collection for credit to an account of a member bank on
our books should forward redeemed food stamp coupons through
ordinary collection channels.




15

FED ER A L RESERVE B AN K
of

N ew

York
Operating Circular No. S
Revised effective September 2,1969

TIME SCHEDULES
Availability of Credit for Cash Items

To the Member Banks and Nonmember Clearing Banks
of the Second Federal Reserve District:

1. Subject to the terms and conditions of Regulation J of the
Board of Governors of the Federal Reserve System, our Operating
Circular No. 4, relating to the collection of cash items, our Operating
Circular No. 7, relating to Saturday closing of our offices and the
offices of other Federal Reserve Banks and Branches, and of this cir­
cular including its appendices, we will give credit on our books to
member and nonmember clearing banks at the times indicated in this
circular including its appendices for cash items (a) received and
accepted at our Head Office or our Buffalo Branch, and (b) payable
in other Federal Reserve Districts or in the territory of the other office
of this Bank and sent, with our permission, direct to the other Federal
Reserve Banks or to the other office of this Bank for our account.
Appendix No. 1 to this circular sets forth our Head Office time sched­
ule, and Appendix No. 2, our Buffalo Branch time schedule.
2. Cash items sent to us by member and nonmember clearing banks
in the territory assigned to our Head Office in New York City (i.e., all
of the Second Federal Reserve District except the following counties
in the State of New York, which are in the territory assigned to our
Buffalo Branch: Allegany, Cattaraugus, Chautauqua, Erie, Genesee,
Livingston, Monroe, Niagara, Ontario, Orleans, Steuben, Wayne, Wyo­
ming, and Yates) should be sent to our Head Office, except that such
banks may, with our prior agreement, send cash items payable in the
Second Federal Reserve District, other than those with routing sym­
bols 0000, 0210, 0260, 0270, and 0280, to our Buffalo Branch. Cash
items sent to us by member and nonmember clearing banks in the
territory assigned to our Buffalo Branch (i.e., the aforementioned
counties in New York State) should be sent to our Buffalo Branch,
except that such banks may, with our prior agreement, send cash
items payable in the Second Federal Reserve District, other than those
with routing symbols 0000 and 0220, to our Head Office in New York
City.




Credit for cash items
3. Credit for cash, items sent to our Head Office or Buffalo Branch
is subject to applicable closing times and to sorting requirements as
shown herein and in the appendices hereto. Credit for items received
by us after the applicable closing times will be computed from our
following business day. When items for which there are different
closing times are not sorted and listed in accordance with the require­
ments, credit for all such items may be deferred for the longest time
for which credit may be deferred for any of such items as provided
herein and in the appendices hereto.
Direct sending to other Federal Reserve Banks
and to the other office of this Bank
4. Member and nonmember clearing banks that have received our
permission to send cash items payaible in other Federal Reserve Dis­
tricts or in the territory of the other office of this Bank direct to other
Federal Reserve Banks or to the other office of this Bank for account
of the office of this Bank at which the sender’s account is maintained
or that are required by us, because of volume, to send such items direct
to those Federal Reserve offices will be given credit for items so sent
as specified below :
(a) Items payable in Federal Reserve Bank or Branch cities—
Based on the time (not in excess of two business days) normally
required for the collection thereof as indicated in separate avail­
ability schedules furnished to the respective direct-sending
banks;
(b) Items payable in localities outside of Federal Reserve Bank
or Branch cities—
Two business days from the dispatch thereof;
provided, however, that this Bank may, by giving notice to such effect
to any member or nonmember clearing bank, prescribe how, and the
time or times before which, all items or certain items must be dis­
patched by such bank in order to obtain such credit.
Time of presentment
5. We do not by this circular, or otherwise, agree to present any
item, or to cause any item to be presented, earlier than such item is
required to be presented, in the exercise of ordinary care, under the
provisions of the Uniform Commercial Code of New York.




2

Special sorting requirements
6. (a) Any member or nonmember clearing bank that has for
collection a daily average of not more than 300 immediate-credit and
deferred-credit items payable outside of the city or town in which
such bank is located may, upon application, be permitted to send its
cash items to us unsorted with one cash letter. Credit for items so
sent, when received by us prior to the applicable closing time, will be
given one business day after receipt.
(b) Any member or nonmember clearing bank that has for
collection a daily average of not more than 2,000 immediate-credit
and deferred-credit items payable outside of the city or town in which
such bank is located may, upon application, be permitted to send its
cash items to us unsorted with one cash letter, provided the dollar
amount is encoded on each item in accordance with The American
Bankers Association Magnetic Ink Character Recognition Program
(MICR amount-encoded). Credit for items so sent, when received by
us in time for presentment on the day of receipt of the immediatecredit items included therein, will be given one business day after
receipt.
7. Any member or nonmember clearing bank that sends to us cash
items payable at banks located in the same city or town as the send­
ing bank or one of its offices must sort, list, and package such items
according to drawee banks.
8. Except as provided in paragraphs 4, 6, 7, and 11, member
banks and nonmember clearing banks may send cash items to us only
in accordance with the sorting requirements shown in the appendices
hereto.

Effect of holidays upon availability
9. No Saturday, Sunday, or other holiday for this Bank will con­
stitute a business day in determining when our Head Office or Buffalo
Branch will give credit for any cash item being collected by us or for
our account.
10. When the day on which credit would otherwise be given pur­
suant to our time schedules is a Saturday, a Sunday, or any other
holiday for this Bank, credit will be given on our following business
day.




3

Credit for transfer drafts
11. Credit will be given for transfer drafts drawn by member
banks or nonmember clearing banks on their commercial bank corres­
pondents based on actual transit time, whether received at our Head
Office or our Buffalo Branch or sent for our account direct to the
Federal Reserve Bank or Branch in the District where such draft is
payable. Such drafts should be sent with separate cash letters; when
such drafts are sent direct to other Federal Reserve Banks or
Branches, separate advices (marked “ Transfer Drafts” ) of such
direct sendings should be sent to the office of this Bank with which
the sending bank maintains its account.
Revision of this circular
12. We reserve the right at any time, with or without notice, to
revoke, modify, amend, or add to this circular, including either of its
appendices, or any provision thereof, effective as to all member banks
and nonmember clearing banks or any of them.
Effect of this circular on previous circulars
13. This circular supersedes our Operating Circular No. 5, Revised
effective February 20, 1967.




A lfred H a tes ,
President.

4

Fed eral R eserve B ank
of

N ew York

[

Appendix No. 1 to
Operating Circular No. 5

I
I

Revised effective September 2,1969 I

NEW YORK HEAD OFFICE TIME SCHEDULE

To the Member Banks and Nonmember Clearing Banks
of the Second Federal Reserve District:

1. Credit for cash items received and accepted at our Head Office
will be given, subject to applicable closing times and to sorting and
other requirements, as shown 'below.
Immediate credit
2. Immediate credit will be given for the following items received
on Mondays through Fridays that are not public holidays:
Items

Closing times

Items on banks in New York City
and Northern New Jersey with
routing symbols 0210, 0260, 0270,
0280*; checks on the Treasurer
of the United States and postal
money orders (routing symbol
0000), if not deposited with a
separate cash letter and total for
each class

If MICR amount-encoded 6:00 a.m.
If not MICR amountencoded
4:00 a.m.
(Or later, whether or not MICR
amount-encoded, if the items are
cleared on the day of receipt)

Checks on the Treasurer of the
United States and postal money
orders

If deposited with a separate
cash letter and total for
each class
1 :30 p.m.

Redeemed U. S. Department of
Agriculture food stamp coupons

Must be deposited with a
separate cash letter and
total
1 :30 p.m.

Checks on the Treasurer of the
United States in amounts of
$5,000 and over
Checks on Federal Reserve Bank of
New York (including Buffalo
Branch)
Officers’ checks of other Federal
Reserve Banks

If deposited with a separate
cash letter and total for
each class
3:30 p.m.

*
Banks that are participants in the L o n g Island Check C le§fjflg Bureau should clear 0280
items, as well as 0214 items, through that Bureau.




Deferred credit
3.
Deferred credit for all items, other than those specified in para­
graph 2 and transfer drafts (see paragraph 11 of Operating Circular
No. 5), that are received on Mondays through Fridays (not public
holidays) and, with respect to certain items, that are received on
Saturdays (not otherwise public holidays) will be given as indicated
below:
(a)
Unsorted items from certain sending banks and items pay­
able in the Second Federal Reserve District—

ONE BUSINESS DAY AFTER RECEIPT
Closing times

Unsorted items

Mixed cash letters from banks with
daily averages of not more than
300 items as specified in para­
graph 6(a) of Operating Circular
No. 5

Mondays through Fridays

1:30 p.m.

Mixed cash letters from banks with
daily averages of not more than
2,000 MICR amount-encoded
items as specified in paragraph
6(b) of Operating Circular No. 5

Mondays through Fridays 6 :00 a.m.
(Or later if the immediate-credit
items are cleared on the day of
receipt)

TWO BUSINESS DAYS AFTER RECEIPT
Items payable in Second
Federal Reserve District

Closing times

Items on banks with routing sym­
bols 0211 through 0217, and 0223

Mondays through Fridays
If MICR amountencoded
1 :30 p.m.
If not MICR amountencoded
12:30 p.m.

Items fully MICR qualified in both
the transit number and amount
fields and sorted by depositing
banks by means of computer
equipment into a separate cash
letter for each group of banks
listed in separately furnished
schedules

Mondays through Fridays 9 :30 p.m.
Saturdays
11:00 a.m.




8

(b)
Items payable in the following Federal Reserve Bank or
Branch cities*—
ONE CALENDAR DAY AFTER RECEIPT

Atlanta
Baltimore
Boston
Buffalo
Charlotte
Chicago
Cincinnati
Cleveland

New Orleans
Philadelphia
Pittsburgh
Richmond
St. Louis
St. Paul, Minn.
San Francisco
Seattle

Dallas
Detroit
Houston
Kansas City, Kan.
Kansas City, Mo.
Louisville
Minneapolis
Nashville

TWO CALENDAR DAYS AFTER RECEIPT

Birmingham
Denver
El Paso
Helena

Omaha
Portland
Salt Lake Citj
San Antonio

J acksonville
Little Rock
Memphis
Oklahoma City

TWO BUSINESS DAYS AFTER RECEIPT

Los Angeles
(c)
Items payable at banks on the Par List in other Federal
Reserve Districts, outside Federal Reserve Bank or Branch cities—
TWO BUSINESS DAYS AFTER RECEIPT

The closing times for the items listed in subparagraphs (b) and (c)
above are as follows:
Mondays through Fridays
If MICR amount-encoded
If not MICR amount-encoded

1 :30 p.xn.
12:30 p.m.

Saturdays
If MICR amount-encoded

11:00 a.m.

Sorting requirements
4.
Except as provided in paragraphs 4, 6, 7, and 11 of Operating
Circular No. 5, the general sorting requirements set forth below will
apply.
*

F or purposes of this circular, the term “ Federal Reserve Bank or Branch cities” includes

Kansas City, K an., and St. Paul, Minn.




3

Immediate-credit items
5. All immediate-credit items may be deposited in a single sort,
including checks on the Treasurer of the United States and postal
money orders (routing symbols 0000, 0210, 0260, 0270, and 0280).
However, if such items are not MICR amount-encoded we may require,
where volume warrants, a separate sort of checks on the Treasurer
of the United States and postal money orders, or of each.
Deferred-credit items
6. All deferred-credit items, including items payable in other
Federal Reserve Districts (all routing symbols other than those indi­
cated in paragraph 5 above), may be deposited in a single sort. How­
ever, we may require, where volume warrants, that such items payable
in other Federal Reserve Districts or in the territory served by our
Buffalo Branch be sent direct and that such items that are not MICR
amount-encoded be sorted into the following two classes:
(a) Those payable in the Second Federal Reserve District with
routing symbols 0211 through 0217, and 0223, and
(b) Those payable in other Federal Reserve Districts, and in the
City of Buffalo with routing symbol 0220, where the volume is not suffi­
cient to require direct sending.
Effect of this appendix upon previous appendix
7. This appendix supersedes Appendix No. 1, dated February 20,
1967, and the First Supplement thereto, dated February 25, 1969.




A lfred H a tes ,
President.

4

Fed eral R eserve
of

N ew

B ank

York
Appendix No. 2 to
Operating Circular No. 5
Revised effective September 2,1969

BUFFALO BRANCH TIME SCHEDULE

To the Member BanTcs and Nonmember Clearing Banks
of the Second Federal Reserve District:

1. Credit for cash items received and accepted at our Buffalo
Branch will be given, subject to applicable closing times and to sort­
ing and other requirements, as shown below.
Immediate credit
2. Immediate credit will be given for the following items received
on Mondays through Fridays that are not public holidays:
Items
Items on banks in Buffalo (routing
symbol 0220); checks on the
Treasurer of the United States
and postal money orders (routing
symbol 0000), if not deposited
with a separate cash letter and
total for each class

Closing times
If MICR amount-encoded 8 :00 a.m.
If not MICR amountencoded
6 :00 a.m.
(Or later, whether or not MICR
amount-encoded, if the items are
cleared on the day of receipt)

Checks on the Treasurer of the
United States and postal money
orders

If deposited with a separate
cash letter and total for
each class
2:30 p.m.

Redeemed U. S. Department of
Agriculture food stamp coupons

Must be deposited with a
separate cash letter and
total
2 :30 p.m.

Checks on the Treasurer of the
United States in amounts of
$5,000 and over
Checks on Federal Reserve Bank of
New York (including Buffalo
Branch)
Officers’ checks of other Federal
Reserve Banks

If deposited with a separate
cash letter and total for
each class
3:30 p.m.

Deferred credit
3. Deferred credit for all items, other than those specified in para­
graph 2 and transfer drafts (see paragraph 11 of Operating Circular




No. 5), that are received on Mondays through Fridays (not public
holidays) will be given as indicated below:
(a) Unsorted items from certain sending banks and items pay­
able in the Second Federal Reserve District—
ONE BUSINESS DAY AFTER RECEIPT
Closing times

Unsorted items

Mixed cash letters from banks with
daily averages of not more than
300 items as specified in para­
graph 6(a) of Operating Circular
No. 5

2 :00 p.m.

Mixed cash letters from banks with
daily averages of not more than
2,000 MICR amount-encoded
items as specified in paragraph
6(b) of Operating Circular No. 5

8 :00 a.m.
(Or later if the immediate-credit
items are cleared on the day of
receipt)

TWO BUSINESS DAYS AFTER RECEIPT
Items payable in Second
Federal Reserve District

Items on banks with routing sym­
bols 0211 through 0217, and 0223

Closing times

If MICR amount-encoded
If not MICR amountencoded

Items of $500 and over on above
banks, if MICR amount-encoded
and deposited in a separate cash
letter

2 :00 p.m.
1 :00 p.m.
3 :00 p.m.

(b)
Items payable in the following Federal Reserve Bank or
Branch cities*—
ONE CALENDAR DAY AFTER RECEIPT

Atlanta
Baltimore
Birmingham
Boston
Charlotte
Chicago
Cincinnati
Cleveland
Dallas
Denver
Detroit
Houston

Jacksonville
Kansas City, Kan.
Kansas City, Mo.
Little Rock
Louisville
Memphis
Minneapolis
Nashville
New Orleans
New York City
Oklahoma City
Omaha

Philadelphia
Pittsburgh
Portland, Ore.
Richmond
St. Louis
St. Paul, Minn.
Salt Lake City
San Antonio
San Francisco
Seattle

* F or purposes o f this circular, the term “ Federal Reserve Bank or B ranch cities” includes
Kansas City, K an., and St. Paul, Minn.




TWO CALENDAR DAYS AFTER RECEIPT

El Paso

Helena

TWO BUSINESS DAYS AFTER RECEIPT

Los Angeles
(c)
Items payable at banks on the Par List in other Federal
Reserve Districts, outside Federal Reserve Bank or Branch cities—
TWO BUSINESS DAYS AFTER RECEIPT

The closing times for the items listed in subparagraphs (b) and (c)
above are as follows:
Mondays through Fridays
If MICR amount-encoded
If not MICR amount-encoded

12 -.30 p.m.
11:30 a.m.

Sorting requirements
4. Except as provided in paragraphs 4, 6, 7, and 11 of Operating
Circular No. 5, the general sorting requirements set forth below will
apply.
Immediate-credit items
5. All immediate-credit items may be deposited in a single sort,
including checks on the Treasurer of the United States and postal
money orders (routing symbols 0000 and 0220). However, if such
items are not MICR amount-encoded we may require, where volume
warrants, a separate sort of checks on the Treasurer of the United
States and postal money orders, or of each.
Deferred-credit items
6. All deferred-credit items, including items payable in other
Federal Reserve Districts (all routing symbols other than those indi­
cated in paragraph 5 above), may be deposited in a single sort, pro­
vided they are deposited prior to the closing hours applicable to items
specified in paragraphs 3 (b) and 3(c) above. However, we may require,
where volume warrants, that such items payable in other Federal
Reserve Districts or in the territory served by our Head Office be sent
direct and that such items that are not MICR amount-encoded be
sorted into the following two classes:
(a) Those payable in the Second Federal Reserve District with
routing symbols 0211 through 0217, and 0223, and
(b) Those payable in other Federal Reserve Districts, and in New
York City and Northern New Jersey with routing symbols 0210, 0260,
0270, and 0280, where the volume is not sufficient to require direct sending.




3

Effect of this appendix on previous appendix
7. This appendix supersedes Appendix No. 2, dated February 20,
1967.




A lfred H ates ,
President.

4

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