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as bills of exchange and promissory notes and no clause condition or limitation, whether writter or printed in said receipt shall be held to limit negotiability or affect the right of holder. The holder of a negotiable receipt acquires such title to the goods as the person negotiating the receipt to him had, or had the ability to convey, to a purchaser in good faith and for value, and also such title to the goods as the depositor or person to whose order the goods were to be delivered by the terms of the receipt had, or had the ability to convey to a purchaser in good faith for value and the direct obligation of the warehouseman to hold possession of the goods for him according to the terms of the receipt. Title subject to lien of landlord or laborer with or without notice on part of purchaser that crop was grown on leased premises. Transferee of receipt gets no greater right than purchaser of cotton where it is actually delivered.

TEXAS-If negotiable warehouse receipt is asked, party placing products in warehouse shall advise warehouseman of any liens on products and if so warehouseman must state nature and amount of lien in blank space on receipt. Holder of warehouse receipt is deemed the owner of the product and in possession of the property and therefore subsequent liens placed on the product do not affect the rights of the holder of a negotiable receipt and product would not be subject to attachment. Transferee's rights subject to landlord's lien, and warehouseman's lien for charges and insurance. Holder protected unless party taking out receipt committed fraud in concealing liens on products at time placed in warehouse.

VIRGINIA-The holder of a negotiable receipt acquires such title to the goods as the person negotiating the receipt to him had, or had the ability to convey, to a purchaser in good faith and for value, and also such title to the goods as the depositor or person to whose order the goods were to be delivered by the terms of the receipt had, or had the ability to convey to a purchaser in good faith for value and the direct obligation of the warehouseman to hold possession of the goods for him according to the terms of the receipt. Where goods delivered to warehouseman and negotiable receipt issued they cannot thereafter while in possession of warehouseman be attached by garnishment or otherwise or be levied upon under an execution, unless the receipt be first surrendered to the warehouseman or its negotiation enjoined. Pledgee of negotiable warehouse receipt obtains a first lien on the commodity which cannot be displaced except by following:

(1) Want of title or authority to bind owner in person delivering goods to warehouse.

(2)

Valid lien on commodity obtained prior to deposit.

(3) Non-existence of commodity in warehouse for which, however, warehouseman is liable.

(4) Amount of advances made and liability incurred for which

warehouseman claims a lien which, in case of negotiable receipt, must be enumerated on face of receipt.

(5) Charges of warehouseman for storage occurring subsequent to date of receipt.

CONDITIONS FOR STATE BANKS AND TRUST COMPANIES

September 1, 1915, the Federal Reserve Board adopted the following conditions to be made a part of certificates of approval of applications of State banks and trust companies. The conditions are not to be construed as indicating opposition on the part of the Federal Reserve Board to branches of these institutions.

(1) The following condition will be inserted in all certificates of approval:

"That, except with the approval of the Federal Reserve Board, there shall be no change in the general character of the assets of, or broadening in the functions now exercised by the such as will tend to affect materially the standard now maintained and required as a condition of membership."

(2)

"That the

The following condition will be inserted in all cases where the applying bank or trust company is authorized by its charter or laws of the State in which it is located to accept domestic drafts: shall in no case accept a domestic draft or bill of exchange unless it is based on a transaction covering the shipment of goods, such transaction to be evidenced at the time of acceptance by accompanying shipping documents, or unless it is secured by a warehouse receipt covering readily marketable staples and issued by a warehouse independent of the borrower or by the pledge of goods actually sold: And provided further, That such bank shall not accept drafts or bills of exchange of any kind, domestic or foreign, to an amount which exceeds at any time in the aggregate more than one-half of its paid-up and unimpaired capital stock and surplus, except that the Federal Reserve Board may authorize such bank to accept such drafts and bills to an amount not to exceed its capital stock and surplus."

(3) The following condition will be inserted in all cases where the applying bank or trust company is authorized by its charter or the laws of the State in which it is located to establish branches:

"That the establishment of additional branches, domestic or foreign, be subject to the approval of the Federal Reserve Board."

Conditions (2) and (3) will not be inserted unless the applying bank has the legal right to accept domestic drafts or to establish branches at the time of admission. If, however, the State law subsequently authorizes either domestic acceptances or branch banks, the

member bank could not at that time under the provisions of condition (1) avail itself of either privilege except with the approval of the Federal Reserve Board. Condition similar to (2) and (3) will be imposed when that subsequent approval is given.

FEDERAL RESERVE BOARD AUTHORIZES LOANS ON COMMODITY PAPER WITH UNUSUAL FEATURES

September 4, 1915, the Federal Reserve Board announced an extraordinary scheme for controlling the loans from the $30,000,000 Government deposits which the Secretary of the Treasury stated recently he would deposit in the federal reserve banks of the South to assist the cotton planters. The board's plan is embodied in new regulations regarding "commodity paper" and trade acceptances, which admit the two kinds of paper to rediscount by the federal reserve banks at lower rates of interest with the waiver of certain specific requirements, than are applicable to transactions in any other sort of paper. The Federal Reserve Board announced as follows:

The Federal Reserve Board has adopted regulations authorizing federal reserve banks to give special rates for rediscount on commodity paper, i. e., promissory notes having not more than 90 days to run which are specifically secured by warehouse receipts for staple and readily marketable commodities of a non-perishable character, properly insured. It is believed that preferential rates on this class of paper will be of especial service at this time in aiding in the gradual and orderly marketing of the cotton and other crops. In order that producers may be directly benefited by the low rates authorized, the board has made it a condition that paper offered by member banks for rediscount at the preferential rate, shall be paper on which the makers have paid or have contracted to pay in the way of interest or discount, including commissions, a rate of not exceeding six per cent. per annum. The Secretary of the Treasury has announced his intention of making deposits in the federal reserve banks which are located in the cotton growing sections, in order that they may have enlarged resources to assist the crop situation. The rediscount facilities offered by the federal reserve banks in the other districts are ample to provide any additional funds that may be needed.

While it is gratifying to note that a large number of member banks throughout the Southern States have announced their intention of making loans on cotton at rates not to exceed six per cent. interest, yet there are many banks which hesitate to make any material reduction in the rates

they have been in the habit of charging on such loans. It is thought, therefore, that by making the preferential rates on commodity paper apply only to notes which have been taken by member banks at rates not exceeding six per cent. per annum, the banks will be encouraged to do their part in promoting orderly methods of crop marketing, and to a greater extent than would otherwise be the case. The benefits of the Federal Reserve Act were intended by Congress to apply to those having dealings with banks as well as to the banks themselves.

A rate of three per cent. for special "commodity paper" has been proposed by the federal reserve banks of Atlanta and Dallas, to which the substance of the proposed regulation had been communicated and this three per cent. rate was approved at the meeting today. This means that the member bank which applies for a rediscount of paper secured by properly insured staples will obtain the funds asked for at three per cent. provided that the total charge made by such member bank to the maker of the paper did not originally exceed six per cent. per annum, including commission.

The new regulation and circular on this topic are as follows:

"COMMODITY PAPER."--In Regulation B, Series of 1915, the board has established the policy of encouraging transactions of federal reserve banks in trade acceptances and in commodity paper by admitting these kinds of paper to be rediscounted by federal reserve banks with the waiver of the particular requirements with reference to statements.

In pursuance of this policy, the board has already published a regu lation laying down the conditions upon which trade acceptances may be rediscounted by federal reserve banks at a special rate to be published for this kind of paper. In further pursuance of the same policy, the board makes provision in the appended regulation for special rates on commodity paper.

It is hoped that this rate will prove its efficacy particularly during the crop-moving season. The board expects that the rate to be established for this commodity paper will, in a manner similar to that for trade acceptances, be somewhat lower than that for commercial paper. It leaves it within the discretion of the federal reserve banks subject to review and determination of the board to establish separate rates for trade acceptances and commodity paper, although in special districts where transactions are had in both kinds of paper it may be politic to have a uniform rate, as may appear desirable to such federal reserve bank.

In this regulation the term "commodity paper" is defined as a note, draft or bill of exchange secured by warehouse terminal receipts, or shipping documents covering approved and readily marketable, non-perishable staples properly insured.

Commodity paper, to be eligible for discount by a federal reserve bank under section 13, at the special rate hereby authorized to be established for commodity paper below the usual commercial rates, must (a) comply with all the requirements of Regulation B, series of 1915, para

graph I. and II., or with the requirements of Regulation C, series of 1915 (b), and be paper on which the rate of interest or discount including commission charged the maker does not exceed six per cent. per annum, and also (c) comply with such regulations as may be issued by federal reserve banks covering requirements as to warehouse or terminal receipts, shipping documents, insurance, etc., adapted to the particular needs of its district as a condition of the special rate herein authorized. Reserve banks are now authorized to submit rates for the discount of commodity paper in accord with this regulation for review by the board.

NEW PLAN TO AID COTTON PLANTERS

September 4, 1915, the Secretary of the Treasury made the following statement:

After a conference with my colleagues in the Federal Reserve Board I have concluded that the best plan for extending aid to the cotton producers of the South is to deposit the $30,000,000 in gold, concerning which I made an announcement a short time ago, in three federal reserve banks, located at Richmond, Atlanta and Dallas, instead of the member banks of the federal reserve system.

Five million dollars will be deposited immediately in each of these banks, making a total initial deposit of $15,000,000. The federal reserve banks have the organization, the knowledge of local conditions and the powers under the Federal Reserve Act and the regulations of the Federal Reserve Board through which the proposed aid may be most effectively rendered.

Today the board adopted regulations concerning "commodity paper." Under these regulations all National banks and State banks, which are members of the federal reserve system, which may lend money to farmers or others on notes secured by cotton properly warehoused and insured, at a rate of interest, including commissions, not exceeding six per cent. per annum, may rediscount such notes with the federal reserve bank of their district.

To illustrate how the proposed relief is available to the cotton producers: A borrower asks his local bank for a loan on his note, secured by warehouse receipts from cotton. If the bank is informed that the cotton is in a responsible warehouse, properly insured and that the note is good, it may make the loan.

If the local bank charges the borrower a rate of interest, including commissions, not exceeding six per cent. per annum, it may indorse the note over to the federal reserve bank of its district and the federal reserve bank may advance to the local bank the full amount of the loan.

The rate of interest which the federal reserve bank will charge the local bank will be sufficiently low, say three per cent., to enable the

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