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Griffin Daily News
‘Computer - Age’ Check
Has Written Language
Money talks. And now the
most important form of money—
the check — has a written lan
guage, too.
ATTENTION
LADIES AND TEENS
WE’RE HAVING A SUMMER
CLEARANCE SALE
THURSDAY, FRIDAY, SATURDAY
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WsW Mr?
Home Delivered or in your favorite Grocers' Dairy Counter! I
12
Wednesday, July 19, 1967
It’s a modern “machine lan
guage’’ that enables checks to
converse with computers. After
Sept. 1, Federal Reserve Banks
will no longer handle checks as
checks unless they “speak” this
language.
This ability of checks to
“talk” to computers has in re
cent years become critically
important because the volume
of checks has become so great
(and is still growing) that they
can be handled efficiently and
economically only by means of
computers.
Federal Reserve Banks pro
vide the largest check collec
tion system in the nation. They
were among the first to use
computers to handle the rising
volume of checks. For the past
few years, they have been pro
viding two systems —a compu
ter sysetm for checks that can
speak the new language, and a
manual system for the old-fash
ioned checks. Now, however,
they can provide the type of ef
ficient and economical service
the nation deserves only if they
handle nothing but checks that
can be computer-processed.
It is for that reason that the
Federal Reserve Banks have an
nounced that, on and after Sept.
1, 1967, they will handle only
checks that are, when received,
already prepared for a trip
through a computer system.
As the checks stream into the
computer at the rate of a thou
sand a minute, the computer
“reads” the following informa
tion: the identity of the bank
on which the check Is drawn;
the Federal Reserve District In
which that bank is located; the
location of the Federal Reserve
office that serves that bank;
whether credit for the check will
be granted immediately or de
ferred; and, of course, the am
ount of the check. When the
check finally arrives back at the
bank on which it was drawn, a
computer there may read still
more data.
Talk about your rapid reading!
The computers modern banks
are using today would put to
shame the entire graduating
class of the fastest rapid-read
ing course ever conducted for
us slow-poke humans.
Technology Plus Cooperation
A special type and a special
ink make it possible. They
have already become familiar
to most check writers in the na
tion. They are those odd-looking
numbers and symbols along the
bottom of a check. The Ameri
can Bankers Association, com
puter manufacturers, and the
Federal Reserve worked toge
ther to develop them and decide
Just where, on a check, they
should appear. Much sincere co
operation and willing sacrifice
went into this joint effort to find
1 ffi
R
I
z
Bank Routing Symbol-Transit Number
identifies tlw Bank on Which Check
IsOrawo
a mutiny satisfactory solu
tion to a problem that was th
reatening to bury the nation’s
banking system under a snow
drift of checks.
Checks were little used a cen
tury ago. Gradually they grew
more and more popular as a
means of payment in the latter
half of the nineteenth century,
but sometimes it took weeks to
collect on an out-of-town check
—even if the bank on which it
was drawn was only a few mil
es away. Almost the only peo
ple who could find a silver lin
ing in that cloud were “rubber
check” writers: It gave them
plenty of time to hide before
their checks bounced.
Then the Federal Reserve Act
was signed by Woodrow Wilson
in 1913, and the newly created
Federal Reserve System was
given the responsibility of doing
something about that costly and
undesirable situation. It did. Th;
use of checks grew rapidly. The
improvements continued. The
growth rate in the use of checks
rose to around 6 percent a year.
More recently it has been 10
percent. Greenbacks and coins
have by no means gone out of
style, but it is now estimated
that at least 90 percent of all
financial transactions are car
ried out by check. Out banking
system expects to be handling
around 22 billion checks a year
by 1970. If placed end to end,
that number of checks could re
ach all the way from solvency
to bankruptcy.
Thus the improvements in the
nation’s check collection system
have stimulated tremendous
growth in the use of checks, re
sulting in an urgent need for
still more improvements in the
collection system.
The special type and ink are
surely not the last improvements
that will be made, but they’re
the biggest by far in many ye
ars. (The type is called “El3b”
type — and that designation will
give you an idea of how many
type designs were tried and torn
up before a satisfactory design
was evolved. The ink is a mag
netic ink, similar to the coating
,
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ENOUGH TO THAW any cold war is this beauty from
behind the Iron Curtain.* Czechoslovakian actress Olinka
Berova, 21, is the first Eastern European actress to be
starred in a major British film.
CHANCING BALANCE OF
MARITIME POWER
? Millions of Gross T0n51962-1966
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While other leading merchant fleets have been adding
tonnage in recent years, the American total has decreased.
The five leading nations account for 64.3 per cent of the
47 million gross tons added to world merchant fleets from
196} to 1966.
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(NAME AND LOCATION OF BANK'S CUSTOMER! ‘
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. A “COMPUTER AGE” CHECK
on magnetic recording tape.)
Participation Nears 100 p e rcent
Most checks handled by Re
serve Banks now have the iden
tity of the bank on which they
are drawn properly imprinted
in this machine language before
they are received. As of April
1967, the proportion not proper
ly imprinted averaged only
slightly more than 2 percent in
all twelve Federal Reserve Dis
tricts combined. In two Dis
tricts, only 0.55 percent were
without the magical magnetic
ink when received. In our own
District, the Sixth District, the
picture was not quite so bright;
almost 3 percent of the checks
received by the Federal Reser
ve Bank of Atlanta and its bran
ches in Birmingham, Jackson
ville, Nashville, and New Orle
ans, were without the magnetic
ink. This was far from the wor
st in the nation, however; in one
District, the percentage of “non
machinable” checks was well
over six.
Deadline: Sept. 1
When is a check not a check?
On and after Sept. 1 of this
year, checks will not be handled
as checks by Federal Reserve
Banks if, at the time they are
received, they do not bear the
routing symbol and transit num
ber of the bank on which they
are drawn. This must, of course,
be in El3b type, in magnetic ink,
and in the proper location, so
computers at the Reserve Banks
and other banks can read them.
The routing symbol is a four
digit number that tells the mach
ine which Federal Reserve Dis
trict the “payor” bank (i.e. the
bank on which the check was
drawn) is located in, which Fe
deral Reserve Bank or branch
serves that bank, and whether
credit will be immediate or de
ferred. To give you an example,
the routing symbol for banks in
Atlanta is 0610: The “06” means
the Sixth District, and the "1”
means the head office of the Fe
deral Reserve Bank of Atlanta,
and the “O” means credit will
not be deferred at all, but will
be given immediately.
The transit number, also a
four-digit number, identifies the
particular payor bank when read
in combination with the routing
symbol. For example, the tran
sit number 0014, following the
routing symbol 0610, refers to a
particular bank in the Atlanta
area. The same number, 0014,
would mean an entirely differ
ent bank if it followed a differ
ent routing symbol.
The routing symbol and tran
sit number always appear to
gether in that sequence on a
properly imprinted check. These
numtfers begin about 5 inches
to the left of the check’s right
hand margin, and run along a
line about. '/ 4 inch above the lo
wer margin. Random examples
might be 0610-0014, 0210-0378, and
1211-0008.
On and after September 1,
1967, if a check doesn’t already
have those numbers in the right
type, ink, and location when re
ceived by a Federal Reserve
Bank, it won’t be handled as a
check. If it’s for SI,OOO or more,
it will be charged back to the
sending bank and entered for
collection as a “noncash” item,
which.means the sending bank
won’t receive credit on it as qui
ckly as it otherwise would. If
it’s for less than SI,OOO, it will
simply be charged back to the
sending bank and returned to it.
The Price of Progress
This method of handling “non
machinable” checks may re
sult in some inconvenience to
banks and to those who receive
| WANT BfG.VA£U£S?,GO GRANTS
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SAT. SPECIALS II II W
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Ruffled or tailored
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2 great styles. Colors. /J A»<*
Matching Valances69c ea. '
Viscose rayon foam
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Plate glass. 24” x 36”.
15 oz. aerosol BEDSPREADS 0 For CE
spray starch I Navy chenille or hobnail in white and *■
Sale 3 for 87 C colors, full or twin size.
REG. 39c ea.
Simple to use! Iron glides
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Waste Bin —
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Sale sls Reg- 19.99
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Cushioned Cushioned Rotary 5' Aluminum
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SHOP OUR FINAL SUMMER CLEARANCE
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Open All Day Wednesdays Plenty of 119 E. Solomon
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such checks in payment for
goods and services. It is a ne
cessary step along the path
(or expressway) into the future,
however, and its goal is a more
efficient payments mechanism
. that will be of general benefit to
all.
It should also be remember
ed that since most checks are
already machinable, it will af
fect, even at the outset, only a
small percentage of the checks
collectable through the Federal
Reserve System’s collection sys
tem; this percentage will stead
ily drop as more and more banks
and businesses have their
checks properly imprinted.
Tips On Writing Checks
First of all, use only the
proper check form. It’s virtual
ly certain that the blank checks
you get from your bank will be
properly imprinted.
If you have your own special
checks printed for yourself of
your business, get the proper
routing symbol and transit num
. ber from your banker, and re
quest your printed to imprint
them in magnetic ink on all
your checks. Your printer can
get detailed and precise speci
fications from any Federal Re
serve Bank. You may also be
able to help your banker by in
cluding your account number
and other information in magne
tic ink. You may wish to consult
him about this.
Don’t use “counter checks” or
draft forms that do not bear the
routing symbol and transit num
ber of your bank in magnetic
i ink. Formerly, it W’as practical
to allow check writers to use
blank forms and write in the
. names of their banks. This
should no longer be done.
Don’t use “made-over” checks
i.e., don’t cross out the name
of one bank and write in the
• name of another. The magnetic
, ink characters — which you
I can’t change by marking over
them — will still identify the
• bank whose name was original
■ ly on the check. Scratching off
; that magnetic ink will only
make the check a nonmachin
able check.
Don’t let anyone else use your
checks, for the same reason.
Even if the other party banks
at the same bank you use, it
may not be safe to let him use
your checks. Your checks may
also bear your account number
, in magnetic ink, so his checks
would automatically be char
ged to your account.
What's In The Future?
There’s already been talk ab
-1 out the possibility of a “check
less” or maybe even “cashless”
society in the future, when all
we’ll need will be something
like a super-credit card.
We can’t get to the relatively
distant future, however, except
by getting through the near fu
ture, and the near future re
quires bringing our checks up
to the computer age. The Sept.
1 deadline is a major milestone
of progress in that direction.