The Bridgeport evening farmer., 1914-11-13

 of those rediscounting in larger amounts-wi11 be so catalogued as to furnish the nucleus of an effective credit bureau, which in turn may eventually develop into a central credit bureau for the benefit Of all the Federal reserve banks of the system
 'FFor the time being certified ac- countants' statements will not be re- quired. This matter is reserved for regulation at a later date. The re- quired statement, as outlined above should be signed under oath, and | should contain 8 short, general de- scription of the character of business, the balance sheet and the profit and loss account. Assets should be dt- 1 vided into permanent or fixed invest ments, slow assets and quick asseCs- On the liability side should be shown capital, long term loans and snort term loans.
 "Short term loans should be in proper proportion to quick assets ana the statement should contain sufficient evidence that short term paper IS not being sold against permanent or slow Investments The statement should furthermore show the maximum az gregate amount up to which the con cern supplying this paper expects 70 borrow on short credit or sa1e or us paper and the concern g1vyeS the statement should ob1igate itself to ob- N fore exceeding the agreed limit.
 'sThe afixing of the stamp stating such paper to be eligible Tor reolF count will be considered solemn ana binding declaration by the menper bank that the statement has beeen ex-9 an1ined from this point of view and that the paper bought complies with all the requirements of the law ana the regulations hereby imposed
 'sThe board appends two additional regulations: No. 3, covering discount transactions on or before January 16; No. 4, discount operations on anu a1- ter January 15.
 Six Months Paper.
 sarhe law provides that the Federal Reserve Board shall fix the percent age of it's capital (by which it is un- derstood the portion of the caplraA paid in), up to which Federal re- serve bank may discount notes, drafts and bills drawn or issued for agricul-' tural purposes or based on live stock, and having a maturity not exceeding six months The law permits the Fed eral Reserve Board to deal with each reserve bank individually in fixing this limit.
 .sThe Federal Reserve Board has determined to fix this limit generally and until further notice at 26 per cent of the capital that shall have been paid in from time to time. For those districts in which during cer- tain seasons six months paper is par ticuIarly required to carry through great operations the limit will be in creased from time to time upon re- quest made by Federal reserve banks to the Federal Reserve Board.''
 Tn board, for the guidance of the Federal reserve and member banks in observing the injunction contained in the law that no bills shall be admit ted to rediscount by the Federal re- serve banks the proceeds of which have been or are to be applied to per manent investment, issued 3 regula- ton (No. 9 which reads, in part as follows:
 "AlI paper offered for discount un- der this section to any Federal re- serve bank must conform to the fol- lowing requirements:
 ..First-It must be indorsed by a national or State bank or trust com pany which is a member of the Fed eraI reserve bank to which 1t Is of fered for grediscount.
 Must Waive Protest
 "Second-such bank must, with It's indorsement, waive demand notice and protest. | .eThird-Paper so offered shall be l in the form of notes, drafts or bills Of exchange, arising out of commercial transactions; that is, notes, drafts and T. 1 agricultural or industrial purposes or the proceeds of which have been used or are to be used for such purposes
 ..Fourth-If in the form of accept ances, they must be based on transac- | tions involving the importation or ex- portation of goods and must have a. | maturity at the time of discount Of not more than three months to run. i Furthermore they must be indorsed l by at least one member bank and the ! cha in no exceed one-half the paid up capital stock and surplus of the bank offer 1 ing same.
 .sFifth-The aggregate of notes and 1 bills bearing the signatures of in- | dorsement of any one person, com pany, firm or corporation, rediscount- ed for any one bank. shall at no l time exceed 10 per cent. of the un- 1 impaired capital and surplus of said Itbank; but this restriction shall not fapply to the discount of bills of ex-
 change drawn in good faith against actually existing values
 Subject to these limitations it de- | wolves upon the Federal Reserve
 Board to determine or deny for the l several Federal reserve banks CD notes, drafts and bills of exchange l eligible for rediscount; I2) bank ac-
 ceptances eligible for deriscount. l Two Kinds of Limitations.
 .sThe limitations relating to redis-
 count operations contained in section 1 13 of the act may be divided into
 two classes: First, those positive limitations under which such notes. drafts and bills of exchange may be
 accepted for rediscount, and second
 those Hn1itatio ons specifically stating; 1 what. paper shall be excluded.
 tR we begin with the latter, we
 find the very clear provision exclud-
 ing all notes, drafts and bills of ex-
 change which are issued or drawn for
 the purpose of carrying or trading in
 stocks, bonds or other investment se- l cErities (except bonds and notes of the Government of the United States)
 This clause does not require comment.
 s.The act further sexcIudeS notes.