Commercial, Agricultural Or Live Stock Paper

Notes, drafts or bills admitted to rediscount must have a maturity at the time of not more than ninety days, exclusive of days of grace, provided that such notes, drafts or bills drawn or issued for agricultural purposes, or based on live stock, and having a maturity not exceeding six months, exclusive of days of grace, may be discounted in an amount limited to a percentage of the assets of the Federal Reserve bank, to be ascertained and fixed by the Federal Reserve Board.

Regulations Of The Federal Reserve Board

Relating to Maturity

Period of maturity; requirements. - The draft or trade acceptance must have a maturity at the time of discount of not more than ninety days, exclusive of days of grace, but if drawn or issued for agricultural purposes or based on live stock, it may have a maturity at the time of discount of not more than six months, exclusive of days of grace.

Opinions Of Counsel And Rulings

Relating to Maturity

Drafts Payable On Condition

A draft made "payable on arrival of car" is non-negotiable, not being payable at a determinable future time and is, therefore, ineligible for rediscount by a Federal Reserve bank.

Drafts payable "on or before" a certain date. - Drafts payable "ninety days from date or before on five days after demand (that is, on five days' notice) by the holder hereof" are negotiable and eligible for discount with a Federal Reserve bank.

Demand Drafts

A demand note or bill is not eligible since it is not in terms payable within the prescribed ninety days, but, at the option of the holder, may not be presented for payment until after that time.

If the bill were altered so as to read "on or before ---------days from date pay to the order of ourselves," etc., it would come within the terms of the law and would be eligible for rediscount.

Extension Of Time

A note or draft containing a provision for an extension of time should not be approved for general use by the Federal Reserve Board.

Amount Of Paper Of One Interest Rediscountable For One Member Bank

General Statutory Provisions

Limitation As To Amount And Acceptance

The aggregate of such notes, drafts and bills bearing the signature or indorsement of any one borrower, whether a person, company, firm, or corporation, redis-counted for any one bank, shall at no time exceed ten percentum of the unimpaired capital and surplus of said bank: but this restriction shall not apply to the rediscount of bills of exchange drawn in good faith against actually existing items.

Regulations Of Federal Reserve Board

On the Rediscount of Drafts and TradE Acceptances

Limitation As To Amount And Exception

The aggregate of notes, drafts and bills bearing the signature or indorsement of any one borrower, whether a person, company, firm, or corporation, rediscounted for any one member bank, shall at no time exceed ten per cent. of the unimpaired capital and surplus of such bank; but this restriction shall not apply to the discount of hills of exchange drawn in good faith against actually existing values.

Opinions Of Counsel And Rulings

On the Rediscount of Drafts and Trade Acceptances