There goes the float, particularly for out-of-town checks
that used to have a minimum two- to three-day float, not counting time spent in the mail.
To avoid such exchange charges, out-of-town checks were usually collected through the correspondent system.(1) Watkins (1929, p.
This method for collecting out-of-town checks involved a lot of paperwork.
119-30) lists a series of proposals and actions by banks to collect out-of-town checks, beginning in 1885.
Banks in some cities attempted to cooperate in coping with the challenge of collecting out-of-town checks. For instance, the Boston clearinghouse established a plan in 1899 for par collection of checks drawn upon all banks located in New England (Hallock 1903).
Their objective was to eliminate the use of out-of-town checks for payments in New York City.
The cost of collecting checks, including the cost (borne primarily by correspondent banks) of routing out-of-town checks to paying banks.
Cleaning Out-of-Town Checks in England and the United States, 1903.