12 U.S.C. § 348 — Discount of obligations given for agricultural purposes or based upon livestock; collateral security for Federal reserve notes

This section has no lettered subsections; it is one connected rule. Endorsement effect: When a member bank endorses one of these notes, that endorsement automatically counts as the bank waiving demand, notice, and protest — but only as to its own endorsement. What can be discounted: Subject to Board of Governors regulations and limits, a Federal Reserve Bank may discount notes, drafts, and bills of exchange that were issued or drawn for an agricultural purpose, or that are based on livestock. These must mature, at the time of discount and not counting days of grace, within nine months. Use as collateral for currency: Such notes, drafts, and bills may be offered as collateral security for issuing Federal Reserve notes under section 16 of the Federal Reserve Act. Proviso — extra rule for longer-term paper: If a note, draft, or bill has a maturity of more than six months, it is not eligible to back Federal Reserve notes unless it is secured by warehouse receipts or similar negotiable documents conveying or securing title to readily marketable staple agricultural products, or by a chattel mortgage on livestock that is currently being fattened for market.