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W. P. G. HARDING, GOYIIMl.lt PAU~ M. WARBURG, YI41 . .YioiJOR FREDERIC A. DELANO ADOLPH C. MILLER CHARLES s. HAMLIN W1LLIAM G. McADOO SECRETARY OF THE TREASURY CHAJRMAN JOHN SKELTON WILLIAMS COMPTROLLER OF THE CURRENCY FEDERAL RESERVE BOARD H. PARKER WILLIS, SECRITAII.Y SHERMAN. P. ALLEN, AliT. SICII.ETARY AND fiSCAL AliiNT WASHINGTON ADDRESS REPLY TO FEDERAL RESERVE IIOARD .!Varch 27 1 1918. L::.ar S2.:r: The Boarci ha.s 1·eceived rrany inl\U.ries of lq,te as to the eligi'Jility of notes ~jven by farmers in payn:.e:o.t of tractors used by th..)m in agr~.r,.ll't.urcd. 0pe·:raticns. The Board has already ruled that notes g1.ven for the pur.chase price of fan11 inplements which are to ba reGolCl. mz;.y be cUs-::ount~d. as corra;ercial paper) and if the implement.B are to be Uf'!e(l. f. ~1r l.l.n agricultural purpose not0s given in payment rrr..y be disr.ounted as agricul turaJ. .Paper. The Board. has considered. the question whether a tractor can be regarded as a farming ir.nploment or Nhether it n;ust be treated as a pern.anent fixed investment.. 'h'hile i t is expected that tha use of a tractor will be extended over several seasons 1 this circumstance does not make neces~ sa:ry the classificr;~tion of a. tractor as a fixed investruent. Horses anJ. n.ules bought for fartL work are purchased with several years 1 use in viaw 1 yet there can be no question that a note given by a fa.nner in payrr.ent of a pair of n:ules to be used in farm work~ n:aturing within six mor,ths 1 is eligible as agr.icultural paper. vVhe:>:'e tractors are used to supplement th0 vvork of horses or m.J.les or are use0. aJ.together instead of these animals 1 H seems to the :aoaro that. nottes given by' farrr:.ors for the purchase price of traetorsJ and maturing -.vith5.:n six rnonths 1 should be ad~itted to discount as agricult,.lr.al. paper,, ano you are requested to advise your member banks accordingly. Very· truly yoursJ Governor. To the Chai m:an ~ The Federal Reserve Bank of
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