Full text of Federal Reserve Bank of St. Louis Circulars : [American Bankers Association Check Mechanization Program]

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F

ederal

R e s e r v e Bank
S

t.

P. O. B o x 4 4 2
Louis 6 6 . Misso

of

S t. Lo u is

uri

February 23, I960

To All Banks in the Eighth
Federal R eserve District:
Banking is now ready to step over the threshold into the new era of
automation.
The years of careful planning by the American Bankers
A ssociation arc now largely behind us and the time for moving ahead on
the ABA check mechanization program is at hand.
Check mechanization became a practical po ssibility la s t year with
the final adoption by banks, b u s in e s s machines manufacturers, and check
printers — under ABA a u s p ic e s — of the common machine language em­
ploying magnetic ink character recognition. In the past year, many banks
have ordered electronic equipment and have begun preprinting their ch ec k s
with magnetic ink characters. The twelve Federal Reserve Banks have
adopted a program under which in sta lla tio n s will be made in five of their
offices to te st the equipment of different manufacturers for performance
capability and for operational and economic feasibility in a variety of
work s itu a tio n s . In addition, the Federal Reserve Bank of St. L ouis is
now preprinting the transit number-routing symbol in magnetic ink on its
official checks.
As you know, the economies which are to be gained by mechanized
check operations cannot be realized until most checks are prepared for
m echanized handling. We want to urge you, therefore, if you have not
already done so, to take the n ece ssary s te p s to have the check forms
which you furnish your d epositors preprinted with the transit number-routing
symbol in magnetic ink chara cters. In addition, it would a lso be a great
help to the program if you would encourage your d epositors who have
ch ec k s printed elsew here to d is c u s s the po ssible need for redesign with
you before reordering su pp lies.
After some initial d ifficu lties, check
printers can now produce magnetic character printing which can be " r e a d ”
satisfa c to rily by electronic machines. We feel sure that you will find
your printer thoroughly familiar with the common machine language program
and ready to a s s i s t you.
We hope you will p articipate in the common machine language program
of the American Bankers A sso ciation , and we believe that w hatever
additional c o s ts maybe involved will be a small price to pay in the in terest
of a more efficient check collection system.
DELOS C. JOHNS
P resident