but if the original mortgage or deed of trust has been drawn in the first instance so as to cover possible future renewals, a new one need not be made. Under no circumstances must the bank obligate itself in advance to make renewals of such a loan.

(g) In order that real estate loans held by a bank may be readily classified, a statement signed by the officers making the loan and having knowledge of the facts upon which it is based, should be attached to each note secured by a first mortgage on the land by which the loan is secured, certifying in detail as of the date of the loan that all the requirements of law have been duly observed.

2. To Bank Examiners-It is unlawful for a national bank or any of its officers, directors, or employees to make any loan or grant any gratuity to a bank examiner.

3. Limitation to one Person, Company, etc.-The total loans of a national bank to any person, company, corporation, or firm (or to the several members of a company or firm) shall not at any time exceed 10% of the amount of the capital stock of the bank, actually paid in and unimpaired, and 10% of its unimpaired surplus funds. In the following cases, however, the transaction is NOT considered a loan within the meaning of the Act:

(a) Discount of bills of exchange drawn in good faith against actual existing values including:

Drafts and bills of exchange secured by shipping documents conveying or securing title to goods shipped.

Demand obligations when secured by documents covering commodities in actual process of shipment.

Bankers' acceptances of the kind described in Section 13 of the Federal Reserve Act (see "Bankers' Acceptances," pages 71, 74). (b) Discount of commercial or business paper actually owned by the person, company, corporation, or firm negotiating such paper. (c) Discount of notes secured by shipping documents, warehouse receipts or other such documents conveying or securing title covering readily marketable, non-perishable staples, including live stock; When the actual market value of the property securing the obligation is not at any time less than 115% of the face amount of the notes secured by such document;

When such property is fully covered by insurance.

(d) Discount of notes amounting to 10% of the bank's capital and surplus, secured by not less than a like face amount of bonds or

notes of the United States issued since April 24, 1917, or certificates of indebtedness of the United States.

A national bank may also make loans secured by United States Bonds and Certificates of Indebtedness issued since April 24, 1917, to an unlimited amount if the par value of the security is 105% of the face of the loan. This privilege, however, expires June 30, 1923.

The accommodations under paragraph (c) on preceding page cannot be granted to any one borrower for more than six months in any consecutive twelve months. Furthermore, the aggregate of such accommodations for each borrower, added to direct loans to the same borrower which are subject to the limit of 10% of the capital and surplus, must not exceed 25% of the bank's paid-in unimpaired capital stock and surplus.

4. On Capital Stock-It is unlawful for a national bank to make any loans or discounts on the security of the shares of its own capital stock.

Some examples of what a national bank may lend at any one time to any one customer under the amendment to section 5200, of October 22, 1919, expressed in terms of percentage of the bank's capital and surplus.

5. Fees to Bank Officers or Employees-No officer, director, employee, or attorney of a national bank may receive or consent to receive any fee, commission, gift or thing of value from any person or firm for procuring or endeavoring to procure a loan from the bank.

6. Balance at Federal Reserve Bank-The balance which an individual bank is required to carry with the Federal Reserve Bank of its district may be checked against and withdrawn by the member bank for the purpose of meeting an existing liability, but no bank shall at any time make new loans (or pay any dividends) until the total balance required by law is fully restored. (See "Reserve Requirements," page 76.)

7. United States Notes as Collateral-No national bank may offer or receive United States notes, or national bank notes, as security for any loan.

B.-GRANTED TO A NATIONAL BANK

1. By Federal Reserve Bank—A Federal Reserve Bank may make loans to its members, on their promissory notes, for a period not exceeding 15 days, provided the promissory notes so given are secured by paper eligible for rediscount or purchase by the Federal Reserve Bank, or by bonds or notes of the United States, or bonds of the War Finance Corporation. (See page 68 ff.)

2. Limitation of Indebtedness-No national bank can at any time. lawfully be indebted to an amount exceeding its capital stock actually paid in and remaining undiminished by losses or otherwise, except on account of demands of the nature following:

(a) Notes of circulation.

(b) Money deposited with or collected by the association.

(c) Bills of exchange or drafts drawn against money actually on deposit to the credit of the association, or due thereto.

(d) Liabilities to the stockholders of the association for dividends and reserve profits.

(e) Liabilities incurred under the provisions of the Federal Reserve Act.

(f) Liabilities incurred under the provisions of the War Finance Corporation Act.

(g) Liabilities created by the indorsement of accepted bills of exchange payable abroad actually owned by the indorsing bank and discounted at home or abroad.

INTEREST

1. Legal Rate-The legal rate of interest for a national bank is governed by the laws of the state in which the bank is located. Where the laws of a state fix a different interest rate for banks of issue organized under state laws, national banks are allowed the same rate. If the state laws do not fix an interest limit, a national bank may charge a rate not exceeding 7 per cent. Such interest may be taken in advance.

The purchase, discount, or sale of a bona fide bill of exchange, payable at a place other 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 a greater rate of interest.

A national bank in making contracts for interest on loans is placed on an equal footing with the citizens and with the banks organized under the laws of the state in which it is located. The national bank may contract for, charge, and receive a rate of interest on a loan made to a resident of another state, at a rate allowed by the laws of that state, even though such rate is greater than that prescribed by or expressed in the laws of the state in which the bank is located, provided

(a) That the note or contract evidencing the loan is made payable or is to be performed in the state authorizing the greater rate,

(b) And that the transaction is made in good faith.

2. On Deposits-Neither the Federal Reserve nor the National Bank Act authorizes a national bank to operate a savings department. Since the capital, deposits and other funds of a national bank may be invested only in conformity with Federal law, the Comptroller's office holds that the sole business of a savings bank which can be legally transacted by a national bank is the paying of interest on deposits. The Federal Reserve Board rules that the term "Savings Account" shall be held to include those accounts of the bank in respect to which, by its printed regulations, accepted by the depositor at the time the account is opened