APPENDIX 
629 
collect as compensation any sum which may be agreed upon by the 
parties to such transaction. The section reads: 
Section 115. Interest on Collateral Demand Loans of not Less Than 
Five Thousand Dollars. Upon advances of money repayable on demand 
to an amount not less than five thousand dollars made upon warehouse 
receipts, bills of lading, certificates of stock, certificates of deposit, bills 
of exchange, bonds or other negotiable instruments, pledged as collateral 
security for such repayment, any bank may receive or contract to receive 
and collect as compensation for making such advances any sum which may 
he agreed upon by the parties to such transaction. 
“Section 201 of the banking law, identical in language with sec- 
tion 115 above quoted, makes the same provision in the case of col- 
lateral loans by trust companies. In the general business law (L. 
1919, ch. 25; Consol L., ch. 20) there is the following general pro- 
vision of a like character: 
Sec. 379. Interest Permitted on Advances on Collateral Security. In 
any case hereafter in which advances of money, repayable on demand, to 
any amount not less than five thousand dollars, are made upon warehouse 
receipts, bills of lading, certificates of stock, certificates of deposit, bills 
of exchange, bonds or other negotiable instruments pledged as collateral 
security for such repayment, it shall be lawful to receive or to contract 
to receive and collect, as compensation for making such advances, any sum 
to be agreed upon in writing, by the parties to such transaction. 
“The national-bank act provides that national banks may receive 
and charge on any loan or discount interest at the rate allowed by 
the law of the State, territory or district where the bank is located. 
The applicable provision reads: 
422, Sec. 3197. Limitation Upon Rate of Interest Which May Be 
Taken. Any association may take, receive, reserve, and charge on any 
loan or discount made, or upon any note, bill of exchange, or other evi- 
dences of debt, interest at the rate allowed by the laws of the State, Ter- 
ritory or District where the bank is located, and no more except that where 
by the laws of any State a different rate is limited for banks of issue 
organized under State laws, the rate so limited shall be allowed for asso- 
ciations organized or existing in any such State under this title. When 
no rate is fixed by the laws of the State or Territory or District, the bank 
may take, receive, reserve or charge a rate not exceeding seven per centum, 
and such interest may be taken in advance, reckoning the day for which 
the note, bill, or other evidence of debt has to run. And the purchase, dis- 
count, or sale of a bona fide bill of exchange, payable at another place than 
the place of such purchase, discount, or sale, at not more than the current 
rate of exchange for sight drafts in addition to the interest, shall not be 
considered as taking or receiving a greater rate of interest. 
“It will be obseryed that the effect of the foregoing provisions is 
to authorize in the State of New York on collateral loans of not less 
than $2,000 rates of interest which may be in excess of those permitted