120. Form Of Note

The form of note employed varies a great deal. The note in use is usually the result of a process of evolution. A bank finds by experience that it is not protected along certain lines by the note in use and instructs its attorney to draw up a new one, having a clause to cover the point in mind. Figure 96 $.................................................... New York,............................190

............................................after date for value received,........................hereby promise to pay to..............................................., or order, at The B National

Bank of the City of New York....................................................................Dollars, with interest at the rate of................per cent. per annum until paid, having deposited herewith the following property, as collateral security for the payment of this note, and also as collateral security for all other present or future demands of any and all kind of the holder hereof against the undersigned, whether created directly or acquired by assignment, whether absolute or contingent, whether due or not due, to wit: -

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.......................................................................................................................................... and do hereby give full authority to the holder hereof to sell the whole or any part thereof, or substitutes therefor or additions thereto, at any broker's board, or at public or private sale, at the option of the holder hereof, upon or after the non-performance of this promise, or upon or after the non-payment of any of the demands aforesaid, and without notice of intention to sell or of the time or place of sale, and without demand of payment of this note or of any of the said demands; and do hereby agree that if in the opinion of the holder hereof the value of the said collateral security or any substituted or hereafter deposited, should at any time be less than ........................................................................................................................ Dollars, the undersigned shall upon demand furnish such further security as will be satisfactory to the holder hereof, and in case of failure so to do, this note thereupon at the option of the holder hereof shall become due and payable forthwith, and then or thereafter the whole or any part or parts of said collateral security or substitutes or additions, may be sold as herein provided, at the option of the holder hereof; and do hereby give full authority to the holder hereof in case of any sale or other disposition of any of the collateral security aforesaid, after deducting all expenses of collection and sale, to apply the residue of the proceeds to pay any or all of said demands in whole or in part, due or not due, including this note, making a rebate of interest upon demands not due. And in case of deficiency, the undersigned agree to pay to the holder hereof the amount thereof forthwith after such sale, with legal interest. It is also agreed and understood that upon any saleof anyof said collaterals the holder hereof may become the purchaser thereof, and hold the same thereafter in his, their or its own right absolutely free from any claim of the undersigned. It is further agreed and understood that no delay on the part of the holder hereof, in exercising any rights hereunder, shall operate as a waiver of said rights.

Figure 96. Collateral Note.

$................................ ........................................................190

....................................................................................after date for value received

...............hereby promise to pay to The Jersey National Bank OF

The City Of New York, or order at said bank, in the City of New York, N. Y.,................................................................................................................Dollars with interest at the rate of....................per cent, per annum until paid, having deposited with said bank, the following property as collateral security for the payment of this note, and also as collateral security for all other present or future demands of any and all kind of the holder hereof against the undersigned, whether created directly or acquired by assignment, whether absolute or contingent, whether due or not due, to wit:-

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and do hereby give the said Jersey National Bank a lien for all of the said demands, upon all property left with said Jersey National Bank, (all re-mittances and property to be deemed left with said bank as soon as put in transit to it, by mail or carrier,) and upon any balance of deposit account with said Jersey National Bank, hereby authorizing said Jersey National Bank to at any time charge any and all of the said demands against the deposit account of the undersigned on the books of the said Jersey National Bank, if there be such an account; and hereby authorize said bank upon or after the non-performance of this promise or upon or after the non-payment of any of the demands aforesaid, or upon or after failure to furnish further security as hereafter agreed, to sell the whole or any part of said collateral security or substitutes therefor or additions thereto, at any Broker's Board or at public or private sale, at the option of said Jersey National Bank without notice of intention to sell or of the time or place of sale and without demand of payment of this note or of any of the said demands, and after deducting all expenses, including all for legal services arising from or incidental to the sale, realization, ,or collection of any of said collateral security, substitutions or additions, or of any of said demands, including this note, to apply the residue of the proceeds to pay any or all of said demands in whole or in part, due or not due, including this note, making rebate of interest upon demands not matured by their terms; and do hereby agree that at any such sale the said Jersey National Bank may become the purchaser of any or all of said collateral security and may hold the same thereafter in its own right absolutely free from any claim of the undersigned; and do further agree that in case of deficiency the undersigned will pay to the said Jersey National Bank the amount thereof forthwith after such sale with legal interest; and do further agree that if in the opinion of said Jersey National Bank or any of its officers the value of the said collateral security or any substituted or hereafter deposited shall at any time be less than....................................................................................Dollars, the under-signed will immediately furnish such further security as will be satisfactory to the Jersey National Bank, and that in case of failure so to do, this note thereupon at the option of i he said Jersey National Bank shall become due and payable forthwith, the said Jersey National Bank being also authorised in such case to sell the collateral security or any part thereof as above provided; and it is hereby further agreed that upon the transfer of this note the Jersey National Bank may deliver the said collateral security or any part thereof to the transferee who shall thereupon become vested with all the powers and rights above given to the said Jersey National Bank in respect thereto, and the said Jersey National Bank shall thereafter be forever relieved and fully discharged from any liability or responsibility in the matter. It is further agreed and understood that no delay on the part of the holder hereof, in exercising any rights hereunder, shall operate as a waiver of said rights.

Figure 97. Collateral Note.

General Loan And Collateral Agreement

In order to obtain loans from and otherwise deal with The ......................

National Bank of the City of New York, the undersigned agrees that all loans, advances or credits hereafter obtained from said bank by the undersigned shall be repayable by the undersigned at said Bank upon demand unless otherwise agreed in writing at the time, and shall bear interest at rates to be agreed upon; and the undersigned further agrees that as collateral security for any and all loans, indebtedness, obligation and liability of the undersigned to said Bank, now or hereafter existing, matured or not matured, absolute or contingent, and wherever payable, including such as may arise from endorsements of notes, acceptances or any other items, or paper discounted by said Bank or held by said Bank as security for any loans or advances of any sort whatever, and including overdrafts, and indebtedness by the undersigned to said Bank, on account of collections or paper received for collection, said Bank shall hold, retain and have a lien upon all moneys, negotiable instruments, bonds, stocks, commercial paper, credits, choses in action, claims and demands of every kind at any time in possession or control of said Bank or any of its agents or correspondents, or in transit to it by mail or carrier, belonging to, for account of or subject to the order of the undersigned; and said Bank shall have the following rights and powers in respect to such collaterals, and every part thereof (in addition to any other rights which it may have): said Bank may at any time or times collect any of such collaterals, and it may endorse any thereof in behalf and in the name of the undersigned; and in case of failure of the undersigned to pay or discharge when due any such loan, indebtedness, obligation or liability, or in case of failure of the undersigned to furnish additional collateral as hereinafter provided, or in case of the insolvency, general assignment, bankruptcy or failure in business of the undersigned, said Bank may sell without notice any of said collaterals at private or public sale or at broker's board (being at liberty to become the purchaser if the sale is public or at broker's board) and may apply any and all money or credits, including the proceeds of any such sale, and any debts, liabilities or balances, due or not due in favor of the undersigned, arising from deposits, discounts, collections, items in transit, or otherwise, at any time owing or due from or chargeable against said Bank, or any of its agents or correspondents, to the payment of expenses of any such sale or sales, or of the realization or collection of any of said collaterals, or of any of said loans, indebtedness, obligation or liability of the undersigned, and to the payment of any or all loans, indebtedness, obligation or liability of the under-signed, whether due or not due; and any or all loans, indebtedness, obligation or liability of the undersigned shall in any of the cases above stated become due at the option of said Bank. If the collaterals at any time securing any loans, indebtedness, obligation or liability of the undersigned to said Bank shall any time be unsatisfactory in amount or otherwise to said Bank, or to any of its officers, the undersigned will immediately furnish such further security as will be satisfactory to said Bank. Said Bank may assign or transfer the whole or any part of any indebtedness, obligation or liability of the undersigned, and may transfer therewith as collateral security therefor, the whole or any part of the collaterals above referred to, and the transferee shall have the same rights and powers with reference to the indebtedness, obligation or liability transferred, and the collaterals transferred therewith, as are hereby given to said Bank.

New York,........................................190

Figure 98. General Loan And Collateral Agreement.

on page 196 is a simple form of collateral note. Figure 97 on page 197 is a valuable note for use when the lending bank is the custodian of securities or funds of the borrower. It gives the lending bank a lien on all remittances to it as soon as they are put in transit. Loans made to brokers in New York City are frequently paid the following day, and an entirely new one made. They are constantly changing, and much time would be lost if a new note is demanded each time a loan is made. After a broker has made several loans which have been entirely satisfactory, he is invited to sign a General Loan and Collateral Agreement and file it with the bank. See Figure 98 on page 198. After filing such an agreement, he has only to present his collaterals in proper shape and receive his check.