(h) Name and address of party to whom note was transferred or delivered by the bank,

(i) Date of such transfer or delivery,

(j) Amount of principal of note,

(k) Rate of interest or discount,

(7) Rate of commission or brokerage charged by bank for acting as broker or agent, and

(m) Amount of such commission or brokerage, and whether said commission was paid by borrower of the money or by the party for whom it was loaned.

5. A book should be kept showing the date on which each mortgage or deed of trust negotiated by the bank has been admitted to record, the court in which the same is recorded, and the recordation fees paid in each case.

6. The records of all profits derived from acting as broker or agent in negotiating loans on real estate should be carried in a separate account on the books of the bank, and the records should be so kept as to enable the examiner readily to trace to the source all items of profit derived in this connection.

7. Deposits of money received by the bank as broker or agent to be invested in loans secured by real estate as prescribed by law, must be treated as trust funds and kept separate and apart from the other assets of the bank. Such funds must in no case be permitted to pass from the possession of the bank until the loan for which they are to be paid out is formally accepted by or in behalf of the party for whose account negotiated.

8. No bank shall advance or use its own funds in connection with real estate loans negotiated as broker or agent.

9. No loans secured by real estate, which the bank has negotiated as broker or agent, should become a part of the assets of the bank even temporarily, unless such loans conform to the provisions of section 24 of the Federal reserve act, as amended.

10. There should be available in the bank for inspection by the national bank examiner

(a) An authoritative statement showing the population of the town according to the last preceding decennial census.

(b) All records pertaining to the negotiation of real estate loans as broker or agent.

123. APPLICATION OF BANK TO BE PERMITTED TO ACT AS BROKER OR AGENT IN PROCURING LOANS ON REAL ESTATE.

National banks acting as broker for the placing of loans should prepare blank forms of application to be executed by applicants for loans. These applications should show

(a) Location of property.

(b) Acreage.

(c) Assessed valuation.

(d) Estimated present value.

(e) Brief descriptions of buildings thereon and estimated value of them.

(f) Whether buildings are insured, and, if so, for what amounts and in what companies.

(g) Whether property is already incumbered, and, if so, for what

amount.

(h) If property is farm property applicant should state whether or not the dwelling is provided with sanitary arrangements approved by the local board of health, and, if not, what sanitary arrangements there are.

At the foot of this application should be printed below the signature of the applicant a statement to the effect that "The statements in the foregoing application have been submitted to this bank by the applicant for the loan, but this bank does not undertake to guarantee the correctness of any of the statements made by the applicant." If any applicant for a loan makes statements in his application which any officers of the bank before whom the application may come may have reason to think are not correct, the attention of the applicant should be called to the possible discrepancy.

NATIONAL BANK DESIRING TO ACT AS BROKER OR AGENT IN MAKING OR PROCURING LOANS ON REAL ESTATE.

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THE COMPTROLLER OF THE CURRENCY,

SIR: The

Washington, D. C.

(title and location of bank) doing business in a town having a population which does not exceed 5,000, as shown by the last preceding decennial census, desires to undertake the business of acting as agent or broker in the making or procuring of loans on real estate, under authority of section 13 of the Federal reserve act, as amended September 7, 1916.

Therefore, we, directors and officers of this bank, in conformity with the rules prescribed by the Comptroller of the Currency, certify that the following is a true and complete copy of resolution adopted by the directors at a meeting held and spread upon the minutes:

National Bank of

are

"Be it resolved, That the officers of the hereby authorized and empowered on behalf of this bank, as broker or agent, to accept from customers of this bank deposits of funds to be invested for account of said customers, in loans secured by real estate, and to procure, as broker or agent for customers of this bank, loans which shall be secured by real estate under the provisions of the act approved September 7, 1916: Provided, That the investment of such funds as stated, and all such procuring of loans or lending of funds for clients, shall be undertaken only under written instructions from the customer for whom this bank, through its officers, may act as broker

or agent, such written instructions in each case to be first delivered to an officer of this bank. Such instructions shall, in all cases, state clearly that the bank in acting as broker or agent in no way guarantees payment of either the principal or interest of any loan so negotiated."

Respectfully,

[SEAL OF BANK.]

President or Vice President.

Cashier.

Directors.

(A majority must sign.)

CHAPTER 12.

DEPOSITS AND REDISCOUNTS WITH FEDERAL RESERVE

BANKS.

124. Deposit of funds or of notes and 128. Acceptance of drafts or bills of bills for collection by member bank in Federal reserve bank.

125. Rediscount of notes, drafts, and

bills of exchange by Federal reserve bank for member bank. 126. Acceptances and limitations thereof-Rediscount of by Federal reserve bank for member bank.

127. Rediscount of paper secured by

bonds or notes of the United
States issued since April 24,
1917.

exchange upon national banks by banks or bankers in foreign countries or dependencies of the United States.

129. Purchase and discount by Federal reserve banks of obligations secured by bonds of War Finance Corporation.

130. Loans by Federal reserve bank to member bank.

124. DEPOSIT OF FUNDS OR OF NOTES AND BILLS FOR COLLECTION BY MEMBER BANK IN FEDERAL RESERVE Bank.

(Act Dec. 23, 1913, sec. 13, as amended Sept. 7, 1916, and June 21, 1917.) Any Federal reserve bank may receive from any of its member banks, and from the United States, deposits of current funds in lawful money, national-bank notes, Federal reserve notes, or checks, and drafts, payable upon presentation, and also, for collection, maturing notes and bills; or, solely for purposes of exchange or of collection, may receive from other Federal reserve banks deposits of current funds in lawful money, national-bank notes, or checks upon other Federal reserve banks, and checks and drafts, payable upon presentation within its district, and maturing notes and bills payable within its district; or, solely for the purposes of exchange or of collection, may receive from any nonmember bank or trust company deposits of current funds in lawful money, nationalbank notes, Federal reserve notes, checks and drafts payable upon presentation, or maturing notes and bills: Provided, Such nonmember bank or trust company maintains with the Federal reserve bank of its district a balance sufficient to offset the items in transit held for its account by the Federal reserve bank: Provided, further, That nothing in this or any other section of this act shall be construed as prohibiting a member or nonmember bank from making reasonable charges, to be determined and regulated by the Federal Reserve Board, but in no case to exceed 10 cents per $100 or fraction

127

thereof, based on the total of checks and drafts presented at any one time, for collection or payment of checks and drafts and remission therefor by exchange or otherwise; but no such charges shall be made against the Federal reserve banks.

125. REDISCOUNT OF NOTES, DRAFTS, AND BILLS OF EXCHANGE BY FEDERAL RESERVE BANK FOR MEMBER BANK.

(Act Dec. 23, 1913, sec. 13, as amended Sept. 7, 1916.) 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 discount notes, drafts, and bills of exchange arising out of actual commercial transactions; that is, notes, drafts, and bills of exchange issued or drawn for agricultural, industrial, or commercial purposes, or the proceeds of which have been used, or are to be used, for such purposes, the Federal Reserve Board to have the right to determine or define the character of the paper thus eligible for discount, within the meaning of this act. Nothing in this act contained shall be construed to prohibit such notes, drafts, and bills of exchange, secured by staple agricultural products, or other goods, wares, or merchandise from being eligible for such discount; but such definition shall not include notes, drafts, or bills covering merely investments or issued or drawn for the purpose of carrying or trading in stocks, bonds, or other investment securities, except bonds and notes of the Government of the United States. Notes, drafts, and bills admitted to discount under the terms of this paragraph must have a maturity at the time of discount of not more than ninety days, exclusive of days of grace: Provided, That notes, drafts, and 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 to be limited to a percentage of the assets of the Federal reserve bank, to be ascertained and fixed by the Federal Reserve Board.

The aggregate of such notes, drafts, and bills bearing the signature or indorsement of any one borrower, whether a person, company, firm, or corporation, rediscounted for any one bank shall at no time exceed 10 per centum of the unimpaired capital and surplus of said bank; but this restriction shall not apply to the discount of bills of exchange drawn in good faith against actually existing values..

126. ACCEPTANCES AND LIMITATIONS THEREOF REDISCOUNT OF BY FEDERAL RESERVE BANK FOR MEMBER BANK.

(Act Dec. 23, 1913, sec. 13, as amended Mar. 3, 1915, Sept. 7, 1916, and June 21, 1917.) Any Federal reserve bank may discount