Commodity Paper

Inventory loans or advances secured by commodities. If the commodities are in transit, a bill of lading is executed by a common carrier. If they are in storage, a trust receipt acknowledges that they are held and that proceeds from their sale will be transmitted to the lender; a warehouse receipt lists the goods.

Note, bill of exchange, or trade acceptance secured by shipping documents or a warehouse terminal receipt, which is payable on demand. Bank endorsed commodity paper is eligible for Rediscount under Federal Reserve Regulation A.