This bank acceptance differs from No. 14 only in the form of certificate indicating its origin. In No. 14, the bank acceptance is based upon a transaction or transactions involving the importation or the exportation of goods. The acceptance illustrated to the left is one "evidencing the domestic shipment against which it was drawn." When this certificate is affixed by the bank, banker or trust company to the instrument, it becomes a bank acceptance eligible for rediscount with the Federal Reserve Banks. It is assumed that the transaction is bona fide and as stated and that the drafts conform in all other respects to the rules and regulations of the Federal Reserve Board.

Form of Bank Acceptance Based upon a Transaction Involving Warehouse Receipts

To the left is a form of Bank acceptance based upon a transaction involving warehouse receipts. Note that the form here is different, though the purpose and idea are the same as in the bank acceptances illustrated in Nos. 14 and 15 preceding. As a time saver, this terra is undoubtedly the better of the three, and can moreover be used for any of the three purposes described. An acceptance of this class is eligible for rediscount with the Federal Reserve Banks.

Commercial Domestic Acceptance Agreement (a)

Giving Rise to Bankers' Acceptances

• •••••••••••••••■■■••••. 19. . • • • •

For and in consideration of the acceptance by Trust

Company/Bank of my/our draft on it numbered..............

dated..............payable..............for............

................................................... Dollars

($........), and all other drafts which may hereafter be accepted by the..............Trust Company/Bank at my/our request, I/We hereby agree to place said Trust Company/ Bank in possession of sufficient funds in cash previous to the maturity of said draft, and of any other drafts which said Trust Company/Bank may hereafter from time to time accept, to meet the maturity of said draft or drafts respectively, together with commission and interest as agreed.

I/We also assume all responsibility of, and said obligation to place said Trust Company/Bank in funds shall not be affected or impaired by, any risk or error in the course of transmission of telegrams and cablegrams or the loss of letters or other documents which may be sent in connection with the said drafts.

In the event of my/our suspension, failure or assignment for the benefit of creditors, or of a petition in bankruptcy being filed against me/us, or the non-fulfillment of any obligation hereunder on my/our part to be performed, all obligations and liabil-ties to said Trust Company/Bank on my/our part shall immediately, without notice, accrue and mature, and become due and payable, and it is also agreed that in any of those events, the said Trust Company/Bank may take such action with respect to the collection of any or all of said drafts as it may deem advisable to protect its interests and I/We hereby agree to indemnify and save said Trust Company/Bank harmless from any loss, costs, damage, expense (including reasonable attorneys' fees), suffered or incurred by reason of such action or by reason of my/our failure to perform any of the obligations arising hereunder.

This obligation shall continue in force and remain applicable notwithstanding any change in the individuals comprising our firm, whether such change shall arise from the ascession of one or more new partners or from the death, retirement or succession of any partner or partners.

All rights arising under this agreement shall be determined according to the laws of the State of

.................... (L. S.).

Explanation - Form No. 17 Herewith is Given a Form of Acceptance Agreement

Here, a purchaser, through arrangement with his bank, may have the seller draw his draft on the latter and accepted by such bank, instead of by himself. As the transaction is one to be carried out entirely within the United States, it is called a Commercial Domestic Acceptance Credit.

This is the usual acceptance agreement between the customer and the bank, whereby the bank undertakes to accept drafts which may be drawn upon it by the seller, on behalf of the buyer, the latter undertaking to supply the bank (acceptor) with funds with which to meet the drafts as they fall due.