LOANS

A.~—GRANTED BY A NATIONAL BANK
1. On Improved Farm Land or Other Real Estate—Until the passage
of the Federal Reserve Act it was not lawful for a national bank
to loan money on real estate. The Reserve Act, however, provided
that any national bank not situated in a central reserve city (i. e., New
York, or Chicago) could make loans secured by improved and unencumbered
 farm land situated:
Within its Federal Reserve District;
Within one hundred miles of the place in which the bank is located, irrespective
of district lines;
and that it could also make loans secured by improved and unencumbered
 real estate situated:

Within one hundred miles of the place in which the bank is located, irrespective
of district lines.

Loans secured by farm land could not be for a longer period than
five years and those secured by other real estate for a longer period
than one year; in respect of both classes of loans the amount of the
loan could not exceed 50 per cent of the actual value of the property
offered as security, and the aggregate was limited to one-third of the
bank’s time deposits or one-fourth of its capital and surplus; the property
 securing the loan could have no prior liens upon it.
Under the Federal Reserve Act as amended on February 25, 1927
any national bank may make loans secured by first lien upon approved
real estate, including improved farm land, situated:

Within its Federal Reserve District; } } )
Within one hundred miles of the place in which the bank is located irrespective
of district lines:

Such loans are defined as “obligations secured by mortgages, trust
deed, or other such instrument upon real estate when the entire
amount of such obligations is made or sold” to the bank. The loans
are subject to the following conditions:

(a) The amount of the loans must not exceed 50 per cent of the actual value of
the property offered as security.
[an]

SO