Abstract: Facsimile or other data to be reduced is scanned and segmented into blocks of isolated figures. The figures are compared to stored templates. If no match is found, the figure remains in place. If a match is found, the figure is erased, i.e., the block is reduced to white. When recognized figures have been erased, the residual image is transmitted using an efficient known two-dimensional encoding compression technique. The locations of figures are specified by inserting identifying data in the data stream at a point corresponding a point on the figure, the preferred point being the lower right-hand corner. If not a recognized template, the receiving end can extract the figure constructed from the data stream and store it in its template memory. If a figure is a recognized template, it is extracted from the receiving end's template memory using the identifying data and inserted into the reconstructed residual image.