Klein's Postal Money Order - 1963 Banking System Innovation


Federal Reserve Pricing Policy on Check Clearing Services: ...
United States. Congress. Senate. Committee on Banking, Housing, and Urban
Affairs - 1984 - Image of intro text:

18. How does the Federal Reserve justify not placing its endorsement on
all items handled by it?
Doesn't this practice make the return items task more difficult for payor
institutions while making the Federal Reserve's processing task easier?

The Federal Reserve places an endorsement on all items that it processes
through reader sort equipment.
However, the Federal Reserve also offers a
program, called "fine-sort," whereby depositing institutions may deposit
checks that have been presorted and packaged according to payor
institution. The Federal Reserve delivers these checks to the payor
institutions along with the checks the Federal Reserve has itself

The collection of checks in the fine sort program is accelerated because
they can be deposited later than other check deposits.

In addition, the fine sort program is the most efficient method of
collecting checks in certain instances, such as when an institution of
first deposit has a relatively large number of checks drawn on a
particular payor institution.
Although the lack of the Federal Reserve
endorsement on checks collected through the fine sort program may be a
source of inconvenience for some depository institutions,
primarily the
larger institutions that may receive checks from several several sources
other than the Federal Reserve, the fine sort program does not result in
significant problems in the return item process. We believe the fine sort
program results in improve- ments in the speed and efficiency of the
nation's check collection system" .....

(Here we have a large bank, Chicago First National, presumably with a
large number of checks (US Treasury) and postal money orders all destined
for the same payor, the Treasurer's ADP system in Washington, DC.)



An item in the May 1965 6-F Messenger, the Bank’s employee magazine, captured the
attitude of some of the operators toward the rapidly disappearing 803 proof machines: