Intraterritory transportation
float results primarily from the inability of a Federal Reserve office
to make presentment of checks to payor institutions as a result of
transportation delays. The MCA requires that all Federal Reserve float
arising from the provision of priced services to depository institutions
be priced. Because of the operational difficulty of allocating intraterritory
transportation float back to specific depository institutions and
in view of the small amount of float involved ($110 million), it would
also be inefficient to attempt to trace the float to individual depositors.
Accordingly, the Board believes that the value of such float should
be added to the cost of the check-collection service. Reserve Bank
performance will continue to be monitored to ensure that intraterritory
transportation float is kept to a minimum and that Reserve Banks continue
to operate efficiently.
