Question 562. - A firm of commission merchants have as part of their business a large warehouse, part of which they use as a bonded warehouse. They sell on commission as agents for various manufacturers and producers in the United States and in Europe, meats, salts, agricultural implements, sugar. and various other lines of merchandise. Their capital is largely invested in their warehouse, and they are, therefore, sometimes obliged to borrow to settle customs duties on goods ordered for local clients, or to enable them to carry consignments. They wish to protect the bank making the advances and purpose doing it by assigning to the bank certain goods, their own property, purchased on their own account and sold by them from time to time to the trade. In what form can the proposed assignment be made, and in what shape can the bank legally accept it? Can the firm give a security receipt seeing the goods assigned are in their own warehouse?

Answer. - Such security would have to be taken under section 88 of the Bank Act, and we do not think any of the above commodities come under its provisions.