PAPER ELIGIBLE FOR REDISCOUNT AND 
PURCHASE BY FEDERAL RESERVE BANKS 
P= which the various Federal Reserve Banks discount and 
buy falls into three general classifications; 
[. 
11. 
Notes, drafts, bills of exchange, trade acceptances and 
nine months’ agricultural paper eligible for rediscount by 
the Federal Reserve Banks 
Bankers’ acceptances eligible for rediscount by the Federal 
Reserve Banks. 
III. Bills of exchange, trade acceptances and bankers’ ac- 
ceptances purchased in the open market by the Federal 
Reserve Bank. 
Since the circumstances governing the discount, rediscount and sale 
or the various types of this paper depend largely upon rulings of the 
Federal Reserve Board, and since these rulings must of necessity be 
changed from time to time, it would be impractical for the purposes 
of this book to minutely detail them here. The question of acceptance 
of drafts or bills of exchange for the purpose of creating dollar ex- 
change is not discussed at all because, although the pertinent rulings 
are of vital interest to a few banks, the type of paper represented is 
not of interest to any great number of banks as acceptors. 
In the discussion of the other three general classes of paper that 
follows, the purpose is to set forth the fundamental principles under- 
lying banking practice in this regard, as allowable under the Federal 
Reserve Act and rulings of the Federal Reserve Board, rather than 
to give a detailed analysis of all the governing conditions. This 
latter named phase of the subject is covered in pamphlet form by the 
Federal Reserve itself, and a copy of the current regulations of this 
body is, of course, at all times in the hands of every member bank. 
GS 
=