The clearing principle as applied to check collection is not limited to the items payable in one city. Many clearing houses formerly had also a department for the clearing of country checks. Such country clearing departments handled out-of-town checks, payable within nearby States, solely for their own members and thereby saved much unnecessary labor by consolidating the items from all the banks into one letter. Thus, instead of receiving a daily letter from each bank in the city, the country bank obtained all its checks from that city in one letter from the clearing house, to which it then remitted with a single draft. The Federal Reserve Act carried this process one step further by requiring the Federal Reserve banks to act as clearing houses for their member banks. Checks which each member bank sends to the Federal Reserve bank serve, generally speaking, as credit offsets to the checks which the Federal Reserve bank receives on that member. The great bulk of out-of-town (transit) items are now handled entirely through the Federal Reserve banks.