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M 1 S C L . 1 4 -8 -2 8 -1 8
F E D E R A L RESE R V E B A N K
OF DALLAS
Circular Ho# 17#
Series of 1918,
BANKERS ACCEPTANCES.
A p r il 9th, 1918
TO ACCEPTING BANKS:
Certain questions have arisen with respect to the au thority of
member banks under the Act and the regulations to accept d r a fts in v o lv in g the
importation or exportation of goods when the transactions on t h e ir face or in
t h e ir nature are not so c le a r-c u t and s p e c i f i c as to leave no question o f
e l i g i b i l i t y , and where other evidence is needed to enable the Federal Reserve
Bank to determine e l i g i b i l i t y *
The matter was submitted to the Federal Reserve Board, and we
g iv e below for your information and guidance,* the ru lin g o f the Board*
Please observe that a contract should be entered into by the
drawer of the d ra ft with the accepting bank in such casep ( a contract should
be made in a l l cases where acceptances are granted),, which should be submitted
to the Federal Reserve Bank, i f c a lle d fo r, when acceptances are o ffe r e d fo r
rediscount or purchase*
R es p e c tfu lly ,
R* L. VAN ZANDT,
Governor«
,{I t appears that c e r ta in dealers in staples who have a large domestic
business are under contract to export food to the a l l i e s « The question has
arisen to what extent and under what circumstances member banks may accept
d rafts or b i l l s or exchange drawn by such dealers#
(1 ) Where the d ra fts are drawn in a domestic transaction, under
sectio n 13, they must be accompanied by shipping documents or the bank must be se
cured at the time o f .acceptance by a warehouse r e c e ip t or other s im ila r document
conveying or securing t i t l e to the goods involved#
(2 ) Where the d ra ft grows o u t 'o f a p a r tic u la r transaction in v o lv in g
the export o f goods the regulations o f the Board require that the b i l l must have
been drawn under a c r e d it opened fo r the purpose of conducting or s e t t l i n g
accounts re s u ltin g from such transactions,,
In other words, i t must appear that the b i l l is drawn and the pro
ceeds are used in connection with the export transaction* The Federal Reserve
Bank must ?$e s a t i s f i e d e ith e r by referen ce to the acceptance i t s e l f or otherwise
that i t is e l i g i b l e fo r rediscountv S a tis fa c to r y evidence of the e l i g i b i l i t y
may consist o f a stamp or c e r t i f i c a t e a f f ix e d by the acceptor in form s a t i s f a c
t o r y to the Federal Reserve Bank,
In the case under consideration i t is assumed th at the d ea ler is
engaged in the purchase o f goods fo r export and is purchasing the same character
and class o f goods fo r domestic use: Some d i f f i c u l t y may be encountered, t h e r e fo r e ,
in ascertain in g whether the goods purchased in any p a r tic u la r tran saction are' to
be used f o r esports or for domestic consumption**
You have asked that consideration be given to the question of what
evidence the accepting bank should require i f the acceptance grows out o f a transjs
action in v o lv in g the export of goods and. what form t h is evidence should take*
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