1. Authority
of Federal Reserve Banks to Discount Agricultural Paper Upon the indorsement of any of its member banks,
which shall be deemed a waiver of demand, notice, and protest by such
bank as to its own indorsement exclusively, any Federal reserve bank
may, subject to regulations and limitations to be prescribed by the
Board of Governors of the Federal Reserve System, discount notes,
drafts, and bills of exchange issued or drawn for an agricultural
purpose, or based upon live stock, and having a maturity, at the time
of discount, exclusive of days of grace, not exceeding nine months,
and such notes, drafts, and bills of exchange may be offered as collateral
security for the issuance of Federal reserve notes under the provisions
of section 16 of this Act: Provided, That notes, drafts, and
bills of exchange with maturities in excess of six months shall not
be eligible as a basis for the issuance of Federal reserve notes unless
secured by warehouse receipts or other such negotiable documents conveying
or securing title to readily marketable staple agricultural products
or by chattel mortgage upon live stock which is being fattened for
market.
[12
USC 348. As added by act of March 4, 1923 (42 Stat. 1479).]
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2. Rediscounts for, and Discount of Notes
Payable to, Federal Intermediate Credit Banks That any Federal reserve bank may, subject to regulations
and limitations to be prescribed by the Board of Governors of the
Federal Reserve System, rediscount such notes, drafts, and bills for
any Federal Intermediate Credit Bank, except that no Federal reserve
bank shall rediscount for a Federal Intermediate Credit Bank any such
note or obligation which bears the indorsement of a nonmember State
bank or trust company which is eligible for membership in the Federal
reserve system, in accordance with section 9 of this Act. Any Federal
reserve bank may also, subject to regulations and limitations to be
prescribed by the Board of Governors of the Federal Reserve System,
discount notes payable to and bearing the indorsement of any Federal
intermediate credit bank, covering loans or advances made by such
bank pursuant to the provisions of section 202(a) of Title II of the
Federal Farm Loan Act, as amended (U.S.C., title 12, ch. 8, sec. 1031),
which have maturities at the time of discount of not more than nine
months, exclusive of days of grace, and which are secured by notes,
drafts, or bills of exchange eligible for rediscount by Federal Reserve
banks.
[12
USC 349. As added by act of March 4, 1923 (42 Stat. 1480); and amended
by act of May 19, 1932 (47 Stat. 160).]
1-126
3. Purchase and Sale of Debentures of Federal Intermediate Credit
Banks Any Federal reserve bank may also
buy and sell debentures and other such obligations issued by a Federal
Intermediate Credit Bank or by a National Agricultural Credit Corporation,
but only to the same extent as and subject to the same limitations
as those upon which it may buy and sell bonds issued under Title I
of the Federal Farm Loan Act.
[12 USC 350. As added
by act of March 4, 1923 (42 Stat. 1480). The meaning of the term “debentures”,
as used above, was affected by act of Aug. 19, 1937 (50 Stat. 718),
12 USC 1040, which provides:
“The terms ‘debenture’
and ‘debentures’, when used in any Act of Congress, whenever enacted,
except the Federal Farm Loan Act, relating to the purchase, sale,
or use as security, of debentures issued by or for the benefit and
account of any Federal intermediate credit bank or banks, shall be
deemed to mean debentures issued by any such bank individually and
consolidated debentures issued by such banks acting together.”]
1-127
4. Paper of Cooperative Marketing Associations Notes, drafts, bills of exchange or acceptances
issued or drawn by cooperative marketing associations composed of
producers of agricultural products shall be deemed to have been issued
or drawn for an agricultural purpose, within the meaning of this section,
if the proceeds thereof have been or are to be advanced by such association
to any members thereof for an agricultural purpose, or have been or
are to be used by such association in making payments to any members
thereof on account of agricultural products delivered by such members
to the association, or if such proceeds have been or are to be used
by such association to meet expenditures incurred or to be incurred
by the association in connection with the grading, processing, packing,
preparation for market, or marketing of any agricultural product handled
by such association for any of its members: Provided, That
the express enumeration in this paragraph of certain classes of paper
of cooperative marketing associations as eligible for rediscount shall
not be construed as rendering ineligible any other class of paper
of such associations which is now eligible for rediscount.
[12 USC 351. As added
by act of March 4, 1923 (42 Stat. 1480).]
1-128
5. Limitations The Board of Governors of the Federal Reserve System may, by regulation,
limit to a percentage of the assets of a Federal reserve bank the amount of
notes, drafts, acceptances, or bills having a maturity in excess of
three months, but not exceeding six months, exclusive of days of grace,
which may be discounted by such bank, and the amount of notes, drafts,
bills, or acceptance having a maturity in excess of six months, but
not exceeding nine months, which may be rediscounted by such bank.
[12 USC 352.
As added by act of March 4, 1923 (42 Stat. 1480).]
