§348 — Title 12 Banks and Banking | U.S. Code

Summary

Federal Reserve banks may buy or lend against notes, drafts, and bills that are endorsed by their member banks. A member bank’s endorsement counts as that bank giving up demand, notice, and protest for its own endorsement. The Board of Governors can make rules and limits for this. The paper must be for farm purposes or based on livestock and must mature within nine months (not counting days of grace). They can back Federal Reserve notes. If a paper matures in more than six months, it only qualifies as backing if it is secured by warehouse receipts or other negotiable papers showing title to readily marketable staple farm products, or by a mortgage on livestock being fattened for market.

Title 12, §348

Banks and Banking — Source: USLM XML via OLRC

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 livestock, 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 livestock which is being fattened for market.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 16 of this Act, referred to in text, means section 16 of act Dec. 23, 1913. For classification of section 16 to this title, see Codification note set out under section 411 of this title. Codification Section is comprised of first par. of section 13A, formerly section 13a, as added Mar. 4, 1923. Pars. 2 to 5 of section 13A are set out as sections 349 to 352 of this title, respectively.

Statutory Notes and Related Subsidiaries

Change of Name

section 203(a) of act Aug. 23, 1935, changed name of Federal Reserve Board to Board of Governors of the Federal Reserve System.

§348 Discount of Obligations Given for Agricultural Purposes or Based Upon Livestock; Collateral Security for Federal Reserve Notes