Advances By Federal Reserve Banks i. General Statutory Provisions.

2. Security.

3. Maturity.

General Statutory Provisions

Maturity; security; eligible paper; U. S. obligations. - Any Federal Reserve bank may make advances to its member banks on their promissory notes for a period not exceeding fifteen days, at rates to be established by such Federal Reserve banks, subject to the review and determination of the Federal Reserve Board, provided such promissory notes are secured by such notes, drafts, bills of exchange, or bankers' acceptances as are eligible for rediscount or for purchase by Federal Reserve banks under the provisions of the Federal Reserve Act, or by the deposit or pledge of bonds or notes of the United States.

Security

Advances On Bonds Or Notes Of The United States

Any Federal Reserve bank may make advances to member banks on their promissory notes, secured either by such notes, drafts, bills of exchange, or bankers' acceptances as are eligible for rediscount or purchase by Federal Reserve banks, or by the deposit or pledge of bonds or notes of the United States.

Opinions Of Counsel And Rulings

Relating to Security on Advances by Federal Reserve Banks

Indorsement Of Collateral

Eligible paper pledged as security for a promissory note of a member bank on which an advance is being made by a Federal Reserve bank need not be indorsed by such member bank if such eligible paper is already in negotiable form.

Collateral Of Government Bonds

Any member bank which has itself purchased obligations of the United States may procure advances from its Federal Reserve bank for not exceeding fifteen days on its own promissory note, provided such note is secured by a deposit or pledge of bonds or notes of the United States.

County Warrants Ineligible

County warrants are not eligible as security for advances by Federal Reserve banks. Member banks, in procuring advances from Federal Reserve banks on promissory notes, must secure such notes by paper eligible for rediscount, or for purchase by Federal Reserve banks, or by bonds or notes of the United States.

Farm Loan Bonds Ineligible

Farm loan bonds being issued by Federal farm land banks, which are incorporated under Federal law, are not obligations of the United States, and are, therefore, not eligible as collateral for promissory notes of member banks.

For conditions governing eligibility of acceptances, drafts and notes, see "Rediscount of promissory notes; eligible drafts and trade acceptances; eligible agricultural paper; eligible commodity paper; eligible bank acceptances."

Maturity

General Statutory Provisions

Period For Which Advances May Be Made

Any Federal Reserve bank may make advances to its member banks on their promissory notes for periods not exceeding fifteen days.

Opinions Of Counsel And Rulings

Notes Due On Sunday Or Legal Holiday

If by reason of a State law, paper falling due on Saturday or Sunday must be collected one or two days before its apparent maturity or one or two days thereafter, interest should be charged accordingly.

Renewals

Renewals may properly be made by Federal Reserve banks on fifteen day notes of the member banks if properly secured, provided that the Federal Reserve bank does not obligate itself in advance to make any such renewal.

An informal ruling of the Federal Reserve Board in connection with renewals is to the effect that the Federal Reserve Board does not wish to prohibit the renewal of fifteen day notes but feels that renewals should be the exception rather than the rule.