Paper REDIscounTED AND BouGHT BY Feperar RESERVE BANKS 
exchange of the kinds and maturities made eligible by the Federal 
Reserve Act for rediscount, with or without the indorsement of a 
member bank. As a matter of fact, the bulk of the Federal Reserve 
Banks’ transactions in paper of this sort consists in sales and purchases 
in the open market, under the section of the Act so permitting. 
The Federal Reserve Board has determined that a bill of exchange 
or acceptance to be eligible for purchase by Federal Reserve Banks 
under this provision of the Federal Reserve Act must 
(a) Conform to the relative requirements of the Board's Regulation A. (Re- 
viewed briefly but not completely in Section I of this Chapter, “Notes, 
drafts, bills of exchange,” etc.) Exception: 
A banker’s acceptance growing out of a transaction involving the storage 
within the United States of goods which have been actually sold, may be 
purchased, providing that the acceptor is secured by the pledge of such 
goods and, providing further, that the bill conforms in other respects to the 
relative requirements of Regulation A. 
b) Must have a maturity at the time of purchase of not more than 90 days, or 
in case of an acceptance drawn for an agricultural purpose, six months. 
A banker’s acceptance growing out of a transaction involving the importa- 
tion or exportation of goods may also be purchased with a maturity not in 
excess of six months, exclusive of days of grace. 
Must have been accepted by the drawee prior to purchase by a Federal 
Reserve Bank, unless it is either accompanied and secured by shipping 
documents, or by a warehouse, terminal, or other similar receipt conveying 
security title, or bears a satisfactory banking endorsement. 
(d) By an amendment adopted as a part of the Agricultural Credits Act of 
March 4, 1923, the Federal Reserve Banks are authorized also to purchase 
and sell in the open market acceptances of Federal intermediate credit 
banks and of national agricultural credit corporations, whenever the Federal 
Reserve Board shall declare that the public interest so requires. 
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